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Sixth-seeded Indian pair of S Rankireddy and Chirag Shetty also progressed to the quarterfinals of the men's doubles event.
India have been placed in Group C along with Malaysia, Chinese Taipei and Australia and their first task will be to make it to the knock-out stage from a potentially trick group.
The ace singles players won their respective first round games in Madrid on Wednesday.
The second-seeded Indian pair defeated the unseeded Chinese duo of Ren Xiang Yu and Tan Qiang 21-19, 24-22 in the summit clash.
In the semifinals, the Indian pair defeated Ong Yew Sin and Teo Ee Yi of Malaysia, 21-19 17-21 21-17.
They will face the Malaysian pair of Ong Yew Sin and Teo Ee Yi in the semifinals.
World No. 9 Sindhu, seeded fourth here, was stunned 15-21 21-12 18-21 by the 38th-ranked Wardani in their first-ever face-off at the international level on Thursday night.
The Indian ace shuttlers had a shocking early exit in the Super 300 event in Basel.
The world No 17 pair will now take on the world No. 23 duo of Liu Xuan Xuan and Li Wen Mei of China in the quarterfinals.
PV Sindhu lost to China's Zhang Yi Man I 39 minutes.