Drawing texture with smaller size results in pixelated image, even after applying filter

Can someone please help me resolve this issue. I’ve tried searching myself and the common answer suggested is to use a TextureFilter. I’ve tried doing that multiple times but nothing works. My png resolution is 1024×1024, and I’m trying to shrink it’s size to fit on screen. This is the kind of result I’m getting, you can see that the circle looks very pixelated, despite the actual image having anti-aliased edges.

[The original image is here.]

Here’s the code:

    SpriteBatch batch;
    Texture img;
    Sprite sprite;

    @Override
    public void create () {
        batch = new SpriteBatch();

        img = new Texture("circle.png");
        img.setFilter(TextureFilter.Linear, TextureFilter.Linear);

        sprite = new Sprite();
        sprite.setRegion(img);
    }

    @Override
    public void render () {
        Gdx.gl.glClearColor(0,0,0,0);
        Gdx.gl.glClear(GL20.GL_COLOR_BUFFER_BIT);

        batch.begin();
        batch.draw(img, 0, 0, 128, 128); //draw texture -- reduced size
        batch.draw(sprite, 200, 200, 128, 128); //draw sprite -- reduced size
        batch.draw(img, 250, 250); //draw texture -- original size
        batch.end();
    }