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With just two teams in Group W, India were assured of a knock-out round berth even before their opening match but the team made its mark in style with the shock win over the top-seeded Chinese side.
India lost 2-3 to China in the semifinals in Dubai on Saturday.
India made a comeback to win 3-2 against Hong Kong in the quarterfinals in Dubai.
PV Sindhu and HS Prannoy were among the winners as India defeated Malaysia to advance.
Earlier, the 18-year-old Lakshya, who had a stellar run in 2019 with five titles, showed his prowess during his straight-game win over Jonatan, who is one of the top medal contenders at the Olympic Games.
Kidambi Srikanth spearheaded India's 4-1 thrashing of Kazakhstan in their opening group match.