An error-prone Somdev, a wild card entrant, lost 3-6, 4-6 in 80 minutes to Lu, ranked 38th in the world.
In his first round match before a supportive crowd at the centre court, Somdev failed to raise his game in his 11th appearance in the ATP event. The 29-year-old top Indian on the ATP World Tour is making his sixth main draw appearance (5-5 record).
It was though a well earned win for Lu as Somdev wilted under pressure and surrendered the initiative after showing glimpses of counter attacking tennis.
The Indian star made mistakes and failed to finish the rallies after holding advantage. In the first set, Somdev was struck to baseline play most of the time by Lu, the top Chinese Taipei player and the Indian came up short in dealing with the situation.
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Lu grabbed the initiative to break Somdev and led 3-1. The Indian managed to hold his serve and then broke back Lu to neutralize the score to 3-3.
However, Lu waited for his chances and managed to take 5-4 lead before holding his serve to win the set and the match.
Earlier, two other Indians also bowed of the tournament with Ramkumar Ramanathan and Vijay Sundar Prashanth losing their first round matches.