Srikanth outwitted world no. 24 Chinese Taipei's Wang Tzu Wei 21-17, 21-18 in a 43-minute contest.
Lakshya Sen moved a place to world number 17, despite not competing in the last two weeks.
Kidambi Srikanth progressed to the men's singles second round with a stunning win over Chinese Taipei's Chou Tien Chen.
Earlier, a series of unforced errors and bad line judgements put Srikanth, world ranked 24, on the back foot as world No. 20 Ka Long looked in fine fettle during the 38-minute men's singles match.
P V Sindhu advanced to the second round after her opponent Li Yvonne Li of Germany retired after the first game.
Former champion PV Sindhu progressed to the women's singles second round but Lakshya Sen went down fighting to world number one Viktor Axelsen at the Singapore Open Super 750 badminton tournament in Singapore on Wednesday.
It was a smooth performance from Sindhu as she was hardly tested by the Taiwanese qualifier
Shooter Bhowneesh Mendiratta's proposal for financial assistance towards a week-long training camp with foreign coach Daniele Di Spigno has also been approved.
Satwiksairaj and Chirag won 21-17, 21-11.
As Kidambi Srikanth lost his second round match, India's campaign ended at the Singapore Open.
Rankireddy and Shetty, who had arrived in Madrid after winning the Swiss Open Super 300 last week, retired from their first-round match
Indian women's doubles pair of Treesa Jolly and Gayatri and Gayatri Gopichand also improved two spots to the 17th position.
Two-time silver medallist P V Sindhu produced yet another commanding performance as she demolished Beiwen Zhang of United States in straight games to advance to the quarter-finals of the BWF Badminton World Championships.
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.
Olympic medallist P V Sindhu is also missing in action as she recovers from an injury.
Both Sen and Srikanth are fighting to be inside the top 16 by April 28 next year to qualify for the Paris Olympics.
Indian Mithun Manjunath stunned fourth seed and world number seven Kean Yew Loh of Singapore in the opening round while PV Sindhu and Kidambi Srikanth secured straight-game wins.
Double Olympic medallist PV Sindhu survived some tense moments before progressing to the women's singles second round, but it was curtains for Lakshya Sen and Kidambi Srikanth in the men's singles at the Badminton Asia Championships, in Ningbo, China, on Wednesday.
Two-time Olympic-medallist P V Sindhu made a winning return from a lengthy injury lay-off as India stunned formidable China 3-2 in the women's competition of the Badminton Asia Team Championships in Shah Alam, Malaysia on Wednesday.
HS Prannoy and PV Sindhu is set to lead India's charge at the upcoming Sudirman Cup.
Prannoy is only seeded Indian player at No. 7 in the men's singles draw of 32 as he will begin his campaign against Loh Kean Yew of Singapore, against whom the Indian has a 4-1 win-loss record.
Lakshya Sen and Kiran George advanced to the second round but HS Prannoy and Kidambi Srikanth made early exits after suffering narrow losses in their respective opening matches at the Indonesia Masters Super 500 badminton tournament in Jakarta on Wednesday.
In mixed doubles, K Sai Pratheek and Tanisha Crasto prevailed 21-18, 21-14 over Macau's Leong Iok Chong and Weng Chi NG to make a winning start.
HS Prannoy climbed up two spots to achieve a career-best world number seven
Srikanth eyes elusive Asian Games medal, hopes to be third time lucky
Kidambi Srikanth made a winning start but PV Sindhu and HS Prannoy were ousted
Chief national badminton coach Pullela Gopichand on Monday singled out world number one doubles pair of Satwiksairaj Rankireddy and Chirag Shetty as favourites for an Olympic medal and said two-time medallist PV Sindhu too is on the right path and can deliver once again at the Paris Games.
Satwiksairaj Rankireddy and Chirag Shetty gained a place to achieve a career-best ranking
The selectors had also proposed to pick one pair each for men's and women's doubles and two mixed doubles combinations through a round-robin tournament format to decide the final standings.
PV Sindhu produced another impressive show as she rallied to a three-game win over USA's Beiwen Zhang to advance to the women's singles quarterfinals
P V Sindhu and Aakarshi Kashyap advanced to the women's singles second round at the Denmark Open Super 750 badminton tournament.
However, a tough contest awaits the former world No. 1 as he faces top seed Kenta Nishimoto of Japan next.
Srikanth, Prannoy enter pre-quarters; Aakarshi knocked out
Srikanth got his act together in the nick of time and reeled off eight straight points to move to a 16-10 lead before keeping his calm to take the match to the decider.
In the men's doubles, Satwiksairaj Rankireddy and Chirag Shetty maintained their world number two ranking, although they lost in the quarter-finals of the World Championships going down to Kim Astrup-Anders Rasmussen.
HS Prannoy made an early exit from the Korea Open Super 500 tournament
Coaching is the toughest job: Saina Nehwal on her future
India thrashed lowly Nepal 3-0 in the quarter-finals to secure a historic medal after 37 years in the men's team badminton event at the Asian Games.
Kidambi Srikanth rallied his way to a thrilling win in a tense decider as India kept alive their hopes of winning a first-ever gold medal at the Asian Games.
India's women shuttlers assured themselves of a maiden Badminton Asia Team Championships medal by cruising to a 3-0 win over Hong Kong in the quarter-finals.
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