Incheon: London Olympic bronze medallist Saina was trailing 21-19, 18-21 and 1-8 against South Korea's Kim Ga Eun when she was forced to retire.
Saina had a 2-0 head-to-head record against Eun in their previous matches.
Saina has had a tough year owing to injuries. She won the Indonesia Open at the beginning of the season but has struggled since then. At the China Open Super 1000 event last week, she made a first-round exit.