GET requests to nginx reverse proxy going in a 302 redirect loop

I have configured an nginx server that is setup as a reverse proxy for my node.js application to serve api requests. When I make POST requests to this nginx server, the request is going to the node app properly, but any GET request on the same results in a 302 redirect loop. I have been trying different configuration changes from 3 days but unable to find a solution

Following is my server block in nginx.conf

    server_name  demo.example.com;
    root         /usr/share/nginx/html;
    # Load configuration files for the default server block.
    include /etc/nginx/default.d/*.conf;
    location /api/ {
            proxy_pass http://demoapi/;
            proxy_next_upstream error timeout invalid_header http_500 http_502 http_503 http_504;
            proxy_set_header Accept-Encoding "";
            proxy_set_header X-Real-IP $remote_addr;
            proxy_set_header X-Forwarded-Proto $scheme;
            proxy_set_header X-Forwarded-For $proxy_add_x_forwarded_for;
            #proxy_set_header X-NginX-Proxy true;
            proxy_http_version 1.1;
            proxy_set_header Upgrade $http_upgrade;
            proxy_set_header Connection 'upgrade';
            proxy_buffers 8 32k;
            proxy_buffer_size 64k;
            proxy_redirect off;
    }

The upstream demoapi is defined as

upstream demoapi {
    server 127.0.0.1:1337;
    keepalive 300;
}

<strike>I am beginning to think that it might be an issue with the nginx version 1.16 installed from amazon-linux-extras as the similar configuration works fine on one of the older servers with nginx version 1.12 installed.</strike>

I finally figured out the root cause of this issue. The 302 redirect was being sent by the sails application running on 127.0.0.1:1337 since it wasn't getting the host header in GET request forwarded (reverse-proxied) by nginx.

To fix the issue, I added the following line to the server location block

proxy_set_header Host $host;

Posting it here so that anyone facing the same issue could get benefitted.