The match was played at the Choa Chu Kan Stadium.
Singapore's Ikhsan Fandi scored the lone goal of the game when he converted a penalty in the 51st minute.
India had beaten Singapore 1-0 in the first match on Sunday, a Germanpreet Singh left-footed curler making the difference between the two sides on that occasion.
The Indian contingent next travel to Doha where they have been clubbed with hosts Qatar, Turkmenistan and Syria in Group C of the AFC U-23 Qualifiers, which kick off on July 19.
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"However, I can say that we didn't deserve to lose the game. The objective is to find players for the senior team and there are certainly some players who if they continue in the manner they are doing now have a serious chance to push for the senior national team," he stated.
Meanwhile, defender Salam Ranjan Singh who faced a nasty challenge in his face was rushed to the hospital for a cut under his lip where he had three stitches.
In next two minutes, the Himachal Pradesh-born goalkeeper showed his character once again when he threw himself to save a point-blank range effort, which was followed by a deadly goal line save by Lalruatthara.
After the clock ticked the 10-minute mark, Germanpreet, who scored the winner two days back, swivelled a long-ranger from the middle of the pitch but Nikhil Poojari couldn't reach it on time.
The Indians had quite a few half-chances in the first half but the sole attack on the target was from Mumbai-based Nikhil Poojari whose feeble header was saved by the opposing goalkeeper in the 38th minute.
After the changeover, the Indians came very close to scoring the opener, but Nikhil's left-footer missed the target by a whisker.
However, Ikhsan Fandi put the hosts in the driving seat from the penalty spot after Salam Ranjan Singh brought him down inside the box.
Seven minutes to the end of the regulation time, Alen Deory could've found the elusive equaliser, but he mistimed his jump and failed to make a contact with the ball.
Manvir continued to impose threats towards the final minutes of the match but his inch-perfect pass in the 87th minute got wasted as Nikhil Poojari caught offside.