Lahiri is nine shots behind defending champion Lee Westwood and Spaniard Alejandro Canizares.
Apart from Lahiri, only three other Indians made the cut. Shiv Kapur (72-71), SSP Chowrasia (76-67) in tied 29th place at one-under and Rashid Khan (73-73) at two-over 146 made the cut.
As the cut fell at two-over, Jeev Milkha Singh (73-74), Rahil Gangjee (77-71), Jyoti Randhawa (76-72), Gaganjeet Bhullar (74-77) and Arjun Atwal (76-75) missed the cut.
Chowrasia, needed a low round after his first round 76, birdied four times on front nine and then had four more on back nine, but he also bogeyed three times to finish at 67 and make the cut comfortably.
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Westwood, 41, is bidding to become only the second player to win the event three times, posted a five-under-par 67 for a two-day score of 11-under-par 133 which was matched by Canizares, who charged into contention with a brilliant 65 at the Kuala Lumpur Golf and Country Club's West course.
Irishman Peter Lawrie, playing on a sponsor's invitation, shot a 66 to share third place with England's Paul Waring (68), while it was a day to forget for co-overnight leader Graeme McDowell, who signed for a 73 to slip six shots off the leading duo.
Thai star Prom Meesawat and former Asian Tour number one Juvic Pagunsan of the Philippines emerged as the leading Asians in tied ninth position after rounds of 72 and 69 respectively for a 140 total.