This is the first time that Sindhu has lost to a fellow Indian in an international event in seven years.
India's badminton great Prakash Padukone will receive the prestigious Lifetime Achievement Award this year from the Badminton World Federation (BWF).
HS Prannoy, who occupies the 8th spot, is the best ranked Indian in the men's singles while Lakshya Sen and Kidambi Srikanth are placed 19th and 20th respectively.
Fellow Indian Kidambi Srikanth also jumped two places to sit at the 12th spot, while Lakshya Sen continued to be the best-placed Indian male shuttler at world number 9.
Seventeen-year-old Unnati, champion at the 2022 Odisha Masters and 2023 Abu Dhabi Masters, was no match for world No. 2 and top seed Pornpawee Chochuwong, going down 14-21, 11-21 in just 39 minutes.
No Indians featured in the women's doubles and mixed doubles rankings.
Srikanth's Malaysia run shows he belongs at the top
India beat England 3-2 in inconsequential tie of Sudirman Cup
Shetty, the lone surviving Indian in the tournament, will next face the winner of the other quarter-final between Chinese Taipei's Chia Hao Lee and second seed Chun-Yi Lin.
Danish badminton player Mia Blichfeldt has criticized the playing conditions at the India Open Super 750 tournament in New Delhi, citing pollution, dirt and bird droppings. She also said she contracted a stomach infection during the event, which she attributed to the poor conditions. The Badminton Association of India (BAI) has acknowledged logistical challenges in hosting the event and is looking for alternative venues. This isn't the first time foreign players have raised concerns about playing conditions at badminton events in India.
London Olympics bronze medallist Saina Nehwal, on the other hand, moved one place to 31st.
The BWF also shared its Standard Operation Procedure with member associations, saying any breach "can result in accreditation being revoked and participants not permitted to enter the venue."
Shuttlers in the singles competition have to be inside top-16 of world rankings to qualify for the Olympics. The cut-off for doubles is also top-16.
The apex body also advised "teams and participants entering tournaments during the European and Asian legs" to "not return to their home countries as many would then have to undergo a 14-day quarantine period upon their return."
The former world junior number one thus joined fellow Indians Aparna Popat (1996), Saina Nehwal (2006) and Siril Verma (2015) in winning a silver medal at the prestigious tournament.
Srikanth needed only 42 minutes to get the better of the 20-year-old Jason Gunawan from Hong Kong 21-19, 21-15 in his round of 16 contest.
India's lack of bench strength was exposed as they suffered a crushing 1-4 defeat against Denmark in their opening Group D match at the BWF Sudirman Cup Finals.
Bhagat now has 11 medals, including six gold, two silver and three bronze medals in the world championships. He has the distinction of reaching the finals in all the editions, barring the 2007 and 2017 World Championships.
In May, the BWF had unveiled a revised international calendar to salvage the remainder of the season. However, with the global health crisis showing no signs of abating, many events were cancelled from the reworked calendar.
Sudirman Cup: India bow out after defeat against Indonesia
In the men's doubles however, the Indian pair of MR Arjun and Dhruv Kapila lost to 11th seeded Russian pair of Vladimir Ivanov and Ivan Sozonov 11-21, 16-21 in a second round match that lasted 41 minutes.
Australia's winter sports community has been forced back into mourning with the sudden death of 20-year-old Olympic figure skater Ekaterina Alexandrovskaya in Moscow.
BWF, in a statement, said that only those athletes eligible for the originally scheduled championships are allowed to enter.
Treesa and Gayatri, seeded fourth, will be the lone Indian challenge left in women's doubles in Basel after Priya Konjengbam-Shruti Mishra and Varshini Viswanath Sri-Arathi Sara Sunil lost their opening-round matches.
Both Super 100 tournaments have now been removed from the BWF's revamped calendar.
The BWF said that it was also looking at options to host its annual general meeting and members' forum which were due to take place in Aarhus in August.
It was yet another forgettable outing in Tokyo for Praneeth, following his struggles at last year's Olympic Games where he participated without a proper coach or physio to eventually bow out early.
Star Indian shuttlers PV Sindhu and Lakshya Sen will spearhead a strong contingent at the USD 250,000 Swiss Open, beginning on Tuesday, aiming to regain top form.
Satwiksairaj Rankireddy and Chirag Shetty advanced to the semifinals of the Malaysia Open
Among other Indians in men's singles, S Sankar Muthusamy Subramanian defeated Malaysia's June Wei Cheam 15-21, 21-15, 21-19 in a tough three-game contest. He will next be up against Indonesia's Chico Aura Dwi Wardoyo.
The duo is aiming for top-30 ranking and continued success in bigger tournaments.
Summary of sports events and persons who made news on Wednesday
Sen rallied from a game deficit to defeat Yusuke Onodera of Japan
The prestigious awards recognise the achievements of the elite badminton players
India's Lakshya Sen came up with a spirited performance to overcome Hong Kong China's Angus Ng Ka Long in three games
The 16-year-old from Gujarat was rewarded for last year's stellar run, which saw her win titles in three junior international tournaments. It enabled her rise three places and take the top position in the BWF junior rankings.
However, the Indian duo of Venkat Gaurav Prasad and Juhi Dewangan suffered a crushing 8-21, 4-21 loss to Denmark's Mathias Thyrri and Mai Surrow, the mixed doubles first round match lasting barely 21 minutes.
Prannoy will next face world number one and Olympic champion Viktor Axelsen on Friday.
Earlier in the day, the mixed doubles pair of Dhruv Kapila and Tanshia Crasto squandered an early lead to go down 21-18, 15-21, 19-21 against Malaysia's Pang Ron Hoo and Su Yin Cheng in the second round.
Despite the name, Indian success at the tournament hasn't been particularly regular with none from the host nation winning any title in the past two editions.