Mertens, who stunned Halep to win the Qatar Open title in February, went out in straight sets to Russia's Daria Kasatkina. The 21-year-old beat her higher-ranked opponent 7-6(8) 7-5 in a little under two hours.
Although Kasatkina had nine double faults to Mertens' four, she won more points on her first and second serve. She also defended set points in both sets to clinch her first top 10 victory since beating Angelique Kerber at Wimbledon last year.
Meanwhile, 2017 French Open champion Ostapenko went down 6-2 4-6 6-0 to compatriot Anastasija Sevastova. Ostapenko was broken seven times in a match where neither player served particularly well.
Former Stuttgart champion Laura Siegemund saw off the challenge of Lesia Tsurenko with a straightforward 6-2 6-2 victory, while Andrea Petkovic beat qualifier Sara Sorribes Tormo 6-3 6-4 to move into the next round.
World number one Naomi Osaka starts her clay court season with a bye in the first round in Stuttgart, and the reigning U.S. and Australian Open champion said her main objective was to avoid injury in the run up to the French Open next month.
"Every other court or (surface), I have more experience than I have on clay because honestly, every time I come here I get injured," Osaka told reporters. "I'm hoping that won't happen this year.
"Every clay season I missed out on at least one tournament. So honestly, my main goal is to not get injured and just ride it up until French Open."
With Halep out of the picture, Osaka only needs to win her opening match to retain her number one ranking. However, if she were to lose her first game and Petra Kvitova were to win the title, the Czech player would be crowned the new world number one.
(Reporting by Rohith Nair in Bengaluru; Editing by Hugh Lawson)
