Bopanna and Raja lost 5-7 5-7 7-5 3-6 to seasoned Daniel Nestor and Vasek Pospisil in two hours and 52 minutes to leave India with the difficult task of winning both the reverse singles to qualify for the elite 16-nation World Group.
Pospisil, 27, was the youngest on the court and the only one who plays the singles as well on the Tour. He made a huge difference to the outcome with his returns from near the baseline and perfect placements at the net.
Pospisil, not nominated for the singles by his captain, troubled both the Indians consistently and carried the home team on his shoulders as 45-year-old Nestor came under pressure several times.
Raja, who has made good progress on the circuit along with Divij Sharan, was superb at the net with his deft volley winners but limitations with his serve and baseline strokes hurt India badly.
Drafted into the side in the last minute, Raja dropped his serve five times in the match -- twice while serving under pressure at 5-6 in the first two sets.
Bopanna's big serving game was also missing today as he served five double faults in team's total of 12. His single- handed backhand winners were nowhere to be seen.
Bopanna though managed to hold serve under pressure, even when faced with a match point in the 10th game of the third set. Neither he got good support from Raja nor he could lift the game of his partner.
Ramkumar Ramanathan, who gave India a point on the opening day, will take on world number 51 Denis Shapovalov on Suday before Yuki Bhambri locks horns with Brayden Schnur.
If Ramkumar manages to pull off a win Shapovalov, it won't be a surprise to see Canada fielding Pospisil instead of Schnur, ranked 202.
At 5-5 on Bopanna's serve, Pospisil first sent a crushing return which the Indian could not pick and then hammered a service return winner to put Indians down 15-30. A confusion between the Indians over who will go for the shot gave the Canadians their first set point but Bopanna held.
It went with serve till Raja came out to serve to stay in the set and immediately went down 0-40 in the 12th game. Under pressure, he served a double fault to gift the rivals the opening set.
The second set began with a rare four straight breaks of serve before Pospisil held in the fifth. In between there was huge drama in the second game when Raja, standing very close to the net, was found guilty of playing the ball before it crossed the net and the chair umpire gave the point to the Canadians.
A furious Indian captain Mahesh Bhupathi argued with the umpire along with Bopanna but the umpire did not budge and the referee asked the players to continue the game and it ended up with Bopanna losing the serve.
There was chance for the Indians to get another break Nestor's serve but could not utilise any of the three chances in the seventh game.
Raja yet again came out to serve at 5-6 and again dropped serve to hand the Canadians a two-set lead. It was Pospisil again who hurt the Indian team with his returns. After saving three set points, Raja failed to pick up a half volley on a ferocious Pospisil return.
The third set was on even keel at 3-3 when Nestor dropped serve to hand India a mini-lead. It was Bopanna's return winner which gave the Indians breakpoint which was converted as the left-hander served a double fault.
However, the Indians could not consolidate the lead with Raja yet again dropping serve with a double fault at 30-40.
India stared at defeat in the 10th on Bopanna's serve but the tall Coorgi came up with good serves after that and held with an ace.
In a sudden change of momentum, Nestor found himself down 0-40 in the next game and lost serve to allow Raja serve out the third set in the 12th.
The Canadians regrouped quickly, broke Raja in the fourth and pulled away with a comfortable 4-1 lead. Pospisil sealed the match for his side when Bopanna's awkwardly-picked return from close to body, went wide.