The Indian showed nerves of steel to come out trumps from a neck-and-neck thriller. He won 21-19, 18-21, 21-15.
Sridhar, who outclassed Olympic gold medallist Taufiq Hidayat on Wednesday, has a tougher task now as he faces defending champion and world No 1 Lin Dan in the next.
However, in the women's singles Saina Nehwal bowed out after losing to world No 4 Pi Hongyan of France in the third round.
Saina put up a gallant show against the much higher ranked opponent before going down 13-21, 17-21.
It was another big victory by Sridhar that will warm the hearts of Indian sports lovers. Both Sridhar and Hashim fought tooth and nail and held the advantage at various points in an hour-long match before a cool and composed Sridhar pocketed it.
In the first game, Sridhar led 11-9 and then 16-11 before Hashim narrowed down the gap to 19-21.
The second game could have very well gone in Sridhar's favour as he fought back from 8-11 down to lead 17-15. But the seasoned Hashim used all his experience to pull himself out of the rut before the home crowd.
Sridhar, however, was not in a mood to relent. He raced to a 9-5 lead in the decider and kept up the momentum to romp home in style.
In the women's singles, Saina threw a tough challenge to Hongyan right from the word go. She was down 9-11 in the first game but from there on the gap increased and Hongyan raced to pocket it.
Saina came back strongly in the second game and even led 12-9 at one stage and matched her opponent shot for shot till 12-12. But then Hongyan tightened the grip on the match and did not concede much ground.
Photogarph: Tengku Bahar/AFP/Getty Images