The victory for the Canadian was his first over Federer in seven meetings and also snapped the Swiss maestro's 14-match winning streak.
Novak Djokovic made it an even worse day for the Swiss 17-time Grand Slam winner when he knocked out Andy Murray 7-5, 6-2 to book his semi-final place.
The Serbian world number one stays on track to maintain his top ranking with Federer less than 500 points behind him coming into Paris.
Djokovic will next face Japan's Kei Nishikori who became the first Asian player to reach the World Tour Finals with a gutsy 3-6, 7-6 (7/5), 6-4 win over Spanish fourth seed David Ferrer.
"I knew before the match there was going to be a lot of long rallies and he's a player who plays well on all surfaces but I'm very happy and hope to continue my run here," said Djokovic who recently became a father.
Winner of six ATP titles, including in Washington this year, Raonic must claim the Paris title to guarantee his place in London for the eight-man season finals.
In a match dominated by serve, Raonic took the first set in a tie-break before forcing the only break of the match at 5-5 in the second before closing out the tie.
Firing down 21 aces, Raonic always had his illustrious opponent under pressure and served out the match in just over 90 minutes.
"Considering all the circumstances around it, I think this was the biggest win for me."
Raonic created the only break point of the first set at 3-2 but Federer was up to the task and held.
Booming first serves from both players dominated affairs and there were 18 aces in the opening set, with Raonic bombing down 11, the last of which painted the line as he claimed the set in just under an hour.
You’ve reached your limit of {{free_limit}} free articles this month.
Subscribe now for unlimited access.
Already subscribed? Log in
Subscribe to read the full story →
Smart Quarterly
₹900
3 Months
₹300/Month
Smart Essential
₹2,700
1 Year
₹225/Month
Super Saver
₹3,900
2 Years
₹162/Month
Renews automatically, cancel anytime
Here’s what’s included in our digital subscription plans
Exclusive premium stories online
Over 30 premium stories daily, handpicked by our editors


Complimentary Access to The New York Times
News, Games, Cooking, Audio, Wirecutter & The Athletic
Business Standard Epaper
Digital replica of our daily newspaper — with options to read, save, and share


Curated Newsletters
Insights on markets, finance, politics, tech, and more delivered to your inbox
Market Analysis & Investment Insights
In-depth market analysis & insights with access to The Smart Investor


Archives
Repository of articles and publications dating back to 1997
Ad-free Reading
Uninterrupted reading experience with no advertisements


Seamless Access Across All Devices
Access Business Standard across devices — mobile, tablet, or PC, via web or app
