Needing 203 to win the match, and the series, England were were right on course at 119 for the loss of two wickets in the 14th over before losing eight wickets in a span of eight runs to be bowled out for 127 midway through the 17th over.
Young leg-spinner Yuzvendra Chahal was the architect of India's win by returning with third best figures in T20 cricket with stats of six for 25, the best by an Indian.
Comfortably batting at 40 off 21 balls, Morgan was the first of those two wickets to go down and then another set batsman Joe Root (42 from 37 balls) followed in the next delivery from Chahal.
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"No, I can't (put a finger on why the collapse happened). We haven't produced a batting performance as bad as that in a couple of years. We pride ourselves on our batting, it has been our strong point for a long time but in this series our bowlers have outperformed our batsmen," he said.
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"(But) Hat's off to India, they really played well and put in performances worthy of winning the series," Morgan said.
"The one thing you do want to do is rotate the strike. It actually gets your eye in, you get to watch the ball from both ends. It's disappointing that we didn't do that. It might have taken a bit of smarter cricket to wrestle back momentum," the English skipper said.
Talking about the limited overs rubber against India, Morgan said losing the ODI series was more painful than the T20 series.
"In the ODIs, it was only about 15-20 runs between winning and losing the series. Probably that hurts us more than losing this (T200 series," he said.