Hello Ashish, 

Thankyou for your response. The reason I used ‘adjust to touch’ is because the initial contact tool shows ‘Open’ with some gap between the hub and the shaft. I was getting convergence error even with time stepping on. I checked the geometric model dimentions and there is an actual gap of 0.2 mm betweed ID of hub and OD of shaft. Using ‘adjust to touch’ helped the model to converge without any errors.  I also checked the video link you referred above. Key takeaways from that are:

a). Assign finer mesh to contact side 

b). Generally convex body is contact & concave or flat body is the target

c). Softer material is the contact side. 

Out of these, which condition should take priority if all the three conditions cannot be true. In my case softer material is the hub which is also concave so if (b) is true then (c) becomes false & vice-versa. Also since there is a D-profile the two surfaces in contact at the bottom are both flat surfaces. Shall I assign two seperate contacts to curved portion and flat portion as per above conditions interchanging contact side and target side respectively to satisfy (a), (b), (C) above?

What should be done in this case?

I shall check stress vs contact change as you suggested and revert back here soon.