Nagal, who is India's second highest ranked men's singles player and holds a world ranking of 136 and Chinese world no. 123 Wang Xiyu are the recipients of the Asia-Pacific wildcard.
Seeded 16th Sumit loses 6-7 (4), 5-7 to Germany's seasoned player Dustin Brown while Prajnesh gets the better of Turkey's Cem Ilkel 6-3, 6-1.
Dominic Thiem beat Sumit Nagal in straight sets to advance to the third round of US Open.
Up next for Sumit Nagal will be Austria's top player Thiem, who prevailed against Spanish rival Jaume Munar 7-6(6) 6-3.
It will be second straight US Open singles main draw for Nagal, who came through the qualifiers last year and played a memorable match against iconic Roger Federer.
Sumit Nagal, who lost to world number 17 and three-time Grand Slam winner Stanislas Wawrinka in the singles, also lost his doubles match to bow out of the tournament.
The 23-year-old Indian bagged the first set 6-2 in stunning fashion after breaking the Swiss heavyweight's serve to raise hopes of an upset win.
Sixth seed and world number 127 had to battle hard to prevail 5-7 7-6(4) 6-3 in two hours and 21-minute second-round contest of the Euro 137,560 clay-court event.
The 22-year-old Indian, playing his first competitive match since his Davis Cup encounter against Croatia's Marin Cilic in March, had received a bye in the opening round.
Nagal is the only Indian in the men's field with Prajnesh Gunneswaran, ranked 132, missing out.
Nagal, who is currently India's highest-ranked singles player at 127, recently defeated second seed German Daniel Masur 6-1, 6-3 in the final match at the tournament.
The Indian Wells was cancelled on Monday due to coronavirus outbreak, leading to frustration among players involved in the tournament.
Sumit Nagal could win just one game in the match which the 2014 US Open Champion won 6-0 6-1 in just 56 minutes.
The hosts will be led by world number 37 Marin Cilic and the 2014 US Open champion is only top-50 singles player in their ranks.
Although the event suffered a mild set back with the withdrawal of the top seed Ricardas Berankis owing to medical reasons, the field still boasts of good players.
Prajnesh Gunneswaran remains a step away from entering the Australian Open main draw, but Sumit Nagal crashed out after facing a first-round loss in the qualifiers.
The only twist in the tale that 2019 served was the rise of the Next Gen power in the form of Daniil Medvedev and Stefanos Tsitsipas.
Nagal, who is currently ranked 130 in the ATP rankings, after having a good season during which he qualified for the US Open main draw and also took a set off the legendary Roger Federer
Sumit Nagal earned his first-ever Davis Cup win, beating Hufaiza Mohammed Rehman 6-0 6-2 in the second singles which lasted 64 minutes.
In their first meeting this year at the Challenger level, 25-year-old Ramkumar, seeded sixth, notched up a 6-4, 7-6 (5) win over Indian No 2 Sumit Nagal, seeded third, in a 97-minute thriller.
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