The fifth seeded Indians lost the summit clash 5-7 6-7(2) in an hour and 29 minutes to the eighth seeded local favourites.
The Koreans, cheered by the home fans, were precise in shot-making and won points with some intelligent tennis against the fighting Indians.
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Sanam had won men's doubles gold with Somdev Devvarman at the Guangzhou edition in 2010.
The Indians kept fighting hard after losing the first set and stretched the second to a tie-breaker. However they were outplayed in the deciding tie break as they trailed 1-4.
The Koreans were soon up 6-2 to earn four match points and converted the first when Sanam hit a forehand long on Lim's serve.
India now have won four medals in tennis, including three bronze -- men's singles, women's doubles and men's doubles.
Myneni still has the opportunity to win a gold with Sania Mirza in the mixed doubles later today.
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