Authorities were searching for Julius Ssekitoleko, 20, who failed to show up for a coronavirus test and was not in his hotel room, host city Izumisano said.
The Sports Authority of India (SAI) said on Thursday that the team had pulled out due to the travel ban imposed by Malaysia in the wake of an unprecedented spike in COVID-19 cases in India.
"The Sports Ministry, through the Ministry of External Affairs, approached the Malaysian authorities requesting to permit the Indian team to participate," SAI said in a statement.
The playbook also said all people visiting Japan for the Games were required to have a smartphone and to download two apps for health reporting and contact tracing. Athletes will receive a Samsung smartphone, it said.
"We asked that around 500 nurses be considered," Tokyo 2020 CEO Muto told a news conference. "The main condition is that this must not negatively affect regional medical care."
The organising committee also said it will convene a roundtable with medical experts on Friday to discuss its COVID-19 measures.
The latest figures suggest support for the Games is slowly growing in Japan, with a similar poll in January finding just 11 percent thought they should go ahead this summer, rising to 21 percent in February.
But Arai said it was not about the money. His concern is simply that doctors would be overwhelmed with coronavirus patients and vaccinations through the summer.