The Indian duo suffered a 16-21, 21-16, 17-21 defeat against the Dutch pair in a contest that lasted more than one hour at the Riocentro arena.
Jwala and Ashwin had also lost their opening match on Thursday -- against the Japanese pair of Misaki Matsutomo and Ayaka Takahashi.
This was the Dutch's pair's second win in as many games and they and the Japanese pair of Matsutomo and Takahashi are through to the quarter-finals.
Jwala and Ashwin will play their final Group A clash against Thai shuttlers Puttita Supajirakul and Sapsiree Taerattanachai, who are also out of the Games.
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