Saina, seeded fourth, was shocked 22-10, 15-21, 20-22 by Yeon Ju Bae of Korea in 71 minutes.
P V Sindhu, the other Indian female in the fray, also failed to clear the second round hurdle, losing to less formidable Kirsty Gilmour of Scotland.
World No 11 Sindhu, who stunned world No 6 Ji Hyun Sung of Korea in straight games in the opening round, lost 21-10, 19-21, 16-21 to 30th ranked Gilmour in a keenly-contested match that lasted exactly an hour.
Indian male shuttlers K Srikanth and Ajay Jayram also bowed out in the second round.
Srikanth gave sixth seed Boonsak Ponsana of Thailand a tough time before going down. He fought valiantly for 58 minutes against the seasoned Thai before losing 21-15, 18-21, 15-21.
Jayram too was shown the door in the second round by top seed Lee Chong Wei of Malaysia.
It was a creditable performance by Jayram against the highly-rated Lee Chong Wei, who had to dig deep for a 21-1,8 21-18 win and a place in the quarter-finals.
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