Li's plan of keeping Sindhu in the front court worked out well as that prevented her from raining down her smashes. Showing quick reflexes and finesse at the net, she kept the home favourite on the backfoot right from the start, building a 9-6 lead.
Sindhu tried to go for her smashes while trailing 7-13 but that was only a brief reprieve before the former Commonwealth Games gold medallist wrapped up the first game.
Sindhu looked more comfortable in the second game to keep things under control till 5-5. Unforced errors on her part then dashed whatever little hope she had of coming back.
Li sailed ahead to 8-5 and allowed her highly accomplished opponent to take four more points before pulling off the upset win much to the disappointment of the spectators.
With Hyderabad's Trump Sourabh Verma and Tanongsak Saensomboonsuk tied at 1-1 on the BWF circuit, their showdown was always expected to be a tight contest.
In a brilliant game that tested the nerves of both the players, it was the North Eastern Warriors shuttler who passed with flying colours. His anticipation skills and quick footwork allowed him to take the opening game 15-14.
Earlier, in an enthralling start to the tie, Hyderabad's mixed doubles pair of Sikki Reddy and Vladimir Ivanov delighted the crowd with a gritty 15-12, 8-15, 15-12 win against the Warriors' Krishna Prasad Garaga and Kim Ha Na.
In men's doubles the Hunters duo of Ivanov and Ben Lane upset the Warriors Trump of Bodin Isara and Lee Yong Dae 15-7, 15-10.