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The world No. 32 Indian pair went down fighting to third seeds Rin Iwanaga and Kie Nakanishi of Japan in a 77-minute clash.
The 21-year-old Priyanshu toiled hard for one hour and 14 minutes before losing 21-18 14-21 17-21.
Tanisha Crasto and Ashwini Ponnappa, who had clinched the Nates International Challenge and Abu Dhabi Masters Super 100 this year, secured a win over Commonwealth Games bronze medallists Treesa Jolly and Gayatri Gopichand.
Orleans Masters winner Priyanshu Rajawat, Denmark Masters winner Kiran George and Sathish Kumar Karunakaran entered the second round with fine victories.
She defeated Malvika Bansod in the final.
Sindhu, the top seed, easily pocketed the first game 21-11 before Kosetskaya conceded the second women's singles semifinal match.
Sindhu will face fifth-seeded Russian Evgeniya Kosetskaya in the semifinals.
Sindhu brushed aside Lauren Lam 21-16, 21-13 while Prannoy beat Priyanshu Rajawat 21-11, 16-21, 21-18.
Former world champion, Sindhu will square off against USA's Lauren Lam, who managed to get past a fighting Ira Sharma 15-21 21-16 21-16.
Sourabh suffered a 15-21 21-19 21-18 first-round defeat to Dwicahyo in a match that lasted one hour and seven minutes.
Results 1-10 of 16
