Federer, bidding for his 101st career title and a record sixth Indian Wells crown, received a walkover into the final, where he will play Dominic Thiem, a 7-6(3) 6-7(3) 6-4 victor over Milos Raonic in Saturday’s only semi-final.
Federer’s scheduled meeting with Nadal would have been the 39th in their long rivalry and the first since 2017, leaving the Swiss to say “it’s a big letdown”, a sentiment felt by everyone at at Indian Wells.
“I warmed up today and I felt that my knee was not good to compete at the level I needed to compete in semi-final,” Spain’s Nadal said in a statement. “It’s tough for me to accept all these things that I’m going through in my career.”
Nadal said he would now return home to Mallorca and would not play in the upcoming Miami Open. He hopes to return at the Monte Carlo Masters, which begins on April 14.
It was just the fifth time in Nadal’s career that he had conceded a walkover, and the first to Federer.
The knee had begun to bother Nadal in the second set of his 7-6(2) 7-6(2) victory over Karen Khachanov in the quarter-finals on Friday.
He had not dropped a set in reaching the semi-finals.
Nadal, who has struggled with knee injuries throughout his stellar career, was the second high-profile player to withdraw from the tournament.
Last Sunday, Serena Williams retired from her match against Garbine Muguruza with what the tournament said was a viral illness.
Thiem saved the lone break point he faced against the big-serving Canadian, which came as he served for the match at 5-4 in the third set.
The Austrian did not make an unforced error in the first set and raced off to a 5-1 lead in the tiebreak.
The 25-year-old fired 10 winners in the set, winning 93 percent of the points when he got his first serve into play, and eventually took the opener in a tiebreak, lacing a backhand winner down the line.
Raonic rescued the only break point in the second set at 2-1 down before going on to force another tiebreak.
A fortunate bounce as a backhand clipped the tape and dribbled over gave him the crucial advantage at 5-3 and helped force a deciding set.
Thiem secured the first break for 3-2 in the deciding set and a volley winner finally secured the victory after an absorbing two and a half hours.
Now with a new coach Nicolas Massu, the Austrian Thiem, who hit 25 winners in advancing to the final, will meet Federer for the fifth time, with their head-to-head score locked at 2-2.
Federer prevailed in straight sets in their most recent meeting in the ATP finals last year after Thiem had won back-to-back encounters in 2016.