The all-Indian quarterfinal clash started with a fiercely contested first game, where Hooda held her nerve to win it 23-21.
Hooda was off to a great start, racing to an 11-3 lead before Sihag staged a spirited comeback to level the scores at 21-21.
The 18-year-old Hooda will next face the winner of the quarterfinal between Chinese Taipei's Chiu Pin-chian and Vietnam's Nguyen Thuy Linh.