Three birdies at the start of the round helped Southgate go three clear at the top early on but bogeys at the fourth and sixth holes dragged him back. A double-bogey at the seventh added to his woes but he recovered ground with a birdie on the ninth.
Southgate showed a lot more composure on the back nine, firing three more birdies to give himself a shot at the title at Al Mouj Golf.
"The birdie at nine was big," Southgate said. "It takes a big heart to hit shots like that because a part of you wants to go and hide in a corner and cry.
"People say, 'keep going', but I'm not going to walk in. You can do two things, you can hide behind your caddie and sulk and knock it around in level or over par, or you can take it on the chin, rise up to the challenge and try to hit good golf shots."
Luiten and Guerrier shot rounds of 66 to stay in the hunt while England's Chris Wood was a shot behind the leaders after a round of 69. Overnight leader Matthieu Pavon was tied seventh.
(Reporting by Shrivathsa Sridhar in Bengaluru; editing by Clare Lovell)
