Seventh seed Sindhu, lone Indian in the women's singles, 16-21 18-21 to fourth seed Chiense Wang Shixian today.
With her defeat India's challenge folded at the event.
Already racing against time to seal his Olympic berth, Kashyap was back on the court after recovering from a series of injuries which derailed his preparation for the Summer Games.
However, the Commonwealth Games champion suffered a knee injury during his clash against eighth seed Son Wan Ho of Korea last night and had to retire midway with the score reading 12-21 11-16 at the RWE-Sporthalle here.
"He is fine now but we are waiting for some tests. Only after that, we can say how much time would be needed for him to recover," Johnson said.
Meanwhile, World No. 10 Kidambi Srikanth, seeded sixth, also bowed out of the men's singles event after losing 21-18 18-21 18-21 to 12th seed NG Ka Long Angus of Hong Kong in another pre-quarterfinals match.
Two-time bronze medallist at the World Championship, PV Sindhu is the only Indian survivor at the event after she reached the quarterfinals, defeating Michelle Li of Canada 21-9 21-17 in a one-sided encounter last night.
The Hyderabad lad was named in the team for the South Asian Games which was held in Guwahati and Shillong early last month but after repeated requests to BAI and SAI, he was put out of the team at the last moment.
The 29-year-old had also skipped the Badminton Asia Team Championship to regain his fitness so that he can take a shot at Olympic qualification by fetching crucial points to reach the World top-16 before the May 1 cut off date.
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