Satwik and Chirag jumped one spot in the latest BWF rankings to regain the fifth place.
Rankireddy and Shetty won 21-12, 21-16 in a quarterfinal match that lasted 49 minutes.
In other India-related results, it was curtains for Ashmita Chaliha, who lost 17-21, 16-21 to Indonesia's world no. 7 Gregoria Mariska Tunjung in 35 minutes. Both teams had received a bye in their opening match.
Satwik and Chirag, ranked sixth in the world, will face the winner of the other semi-final between Indonesia's Pramudya Kusumawardana and Yeremia Erich Yoche Yacob Rambitan and second seeds Aaron Chia and Wooi Yik Soh of Malaysia in their maiden World Tour Super 1000 final.
World champion Kunlavut Vitidsarn crashed out of the India Open Super 750 badminton tournament
Seven Indian shuttlers, including Saina Nehwal and Jwala Gutta, officially earned qualification berths for the August Olympic Games in Rio de Janeiro after the much-awaited BWF world rankings were released on Thursday. Friday's rankings were used to determine the Olympic qualifiers in each of the five categories -- men's singles, women's singles, men's doubles, women's doubles and mixed doubles -- from the points accumulated in the period between May 4, 2015 and May 1st, 2016. Four years ago, five Indians had qualified at London Olympics. This year, London Olympics bronze medallist Saina would be representing India in her third Games, while the women's doubles pair of Jwala and Ashwini Ponnappa will also play their second Olympics in August. Besides, K Srikanth and P V Sindhu earned their maiden Olympic berths in men's singles and women's events respectively. For the first time, India will have two women's singles players playing in the Olympics.
A weak return from Prannoy was disposed off quickly as Ka Long lead 17-8. Prannoy tried to up the pace only to falter at the net.
P V Sindhu sought the help of the legendary Prakash Padukone and trained at his academy in Bengaluru last week.
Earlier, the Badminton Association of India (BAI) had said in an update that Satwik had suffered a groin injury.
Lakshya Sen suffered a stunning first round exit as India's challenge came to an end in the German Open.
Indian ace Saina Nehwal's poor form in the international arena continued as she lost to Japan's Minatsu Mitani 21-19, 22-24, 19-21 in a hard-fought three-game battle in her opening match of the BWF Superseries Finals in Kuala Lumpur.
Satwiksairaj Rankireddy and Chirag Shetty earned India's first-ever badminton gold medal at the Asian Games
BWF said that Finland will host the Sudirman Cup Finals in September-October while the season-ending World Tour Finals will be staged in Indonesia.
India signed off in 12th place in the last edition in 2019, with the country's best result being a fourth-place finish in the 2008 edition.
Lakshya Sen said the win against reigning All England Champion Li Shi Feng gives him confidence and belief in the Olympic qualification year.
Kidambi Srikanth made a winning start but PV Sindhu and HS Prannoy were ousted
World number 14 Kidambi Srikanth has also withdrawn from the tournament and is in quarantine due to his close contact with Sai Praneeth, BWF said. Srikanth had returned a negative result on Monday.
It's going to be a hell of journey, says Sindhu welcoming new coach Hafiz Hashim
Lakshya Sen's woeful run continued as he made a first round exit
Young Kidambi Srikanth continued his meteoric rise in world badminton as he ended the season by becoming only the third Indian male shuttler to break into the top-five, reaching a career-high fourth after hovering in the 40s in the beginning of the year.
Rankireddy and Shetty, who had arrived in Madrid after winning the Swiss Open Super 300 last week, retired from their first-round match
H S Prannoy lost a three-game thriller to China's Weng Hong Yang in the men's singles final.
India's Tokyo Paralympics gold winner Pramod Bhagat was on Thursday named among six shuttlers for the Male Para Badminton Player of the Year by the sport's world body but none of his compatriots featured in the able-bodied awards' categories.
Star Indian shuttlers PV Sindhu and Kidambi Srikanth will look to arrest their slump in form when they begin their campaign at the Australia Open badminton tournament in Sydney on Tuesday.
Manjunath will play Taipei's Yu Jen, who was lucky to progress after fifth seed Rasmus Gemke retired in the second game after pocketing the first.
After Indonesia and South Korea on Friday joined Thailand, Australia, Chinese Taipei and Algeria in pulling out due to the dreaded disease
Saina Nehwal produced a fine performance to kick-off her BWF World Championships campaign with a straight game win over Hong Kong's Cheung Ngan Yi.
Prannoy signs off with maiden World Championships bronze medal after losing semifinal to Vitidsarn
Srikanth eyes elusive Asian Games medal, hopes to be third time lucky
Lakshya Sen sails into third round of World Championships
'Both Saina Nehwal and HS Prannoy have been cleared to participate in the ongoing Yonex Thailand Open after the fourth-round tests reports confirmed that both shuttlers have been tested negative for COVID-19.'
F1 winner from 1950s, Brooks dies aged 90
The world number 18 Indian will now take on former world champion, Singapore's Loh Kean Yew in the second round.
Chirag said "it is difficult to stay motivated" in such uncertain times.
Tasnim Mir, who earlier this month became the first Indian to claim world number one status in the U-19 category, beat Keyura Mopati 13-21, 21-14, 21-19 to set up a second round clash against Malvika Bansod.
The Badminton World Federation has postponed the Thomas and Uber Cup, the premier global men's and women's team championship, to be held in Denmark for three months from the earlier scheduled date in May in view of the COVID-19 pandemic.
Their only loss came against group toppers China, the most successful team in the tournament with 13 titles, in their second group tie on the opening day of the tournament.
The Hyderabad Open badminton tournament, scheduled to be held from August 11 to 16, was on Thursday cancelled by the world body BWF in view of the coronavirus pandemic. The event was part of the BWF's revised calendar to restart the sport after the pandemic-forced cancellations since March.
Besides Srikanth, the other players withdrawn are Ashwini Ponnappa, Ritika Rahul Thkar, Treesa Jolly, Mithun Manjunath, Simran Aman Singh and Khushi Gupta.
It was a mixed day for India in the All England Championship as Treesa Jolly and Gayatri Gopichanda clinched a stunning win, while Lakshya Sen crashed out.