Local favourite Peng, a former U.S. Open semi finalist, finished off her rain-delayed semi-final over Danka Kovinic earlier on Sunday, coming back from a set down to prevail 3-6 7-5 6-3.
Riske, who also played her semi-final earlier on Sunday, was bidding for her second Tour title but failed to recapture the form she displayed in her 6-4 5-7 6-4 semi-final upset of Russian second seed Svetlana Kuznetsova.
Defending champion Agnieszka Radwanska, who was to face Peng in the quarter-finals, withdrew from the tournament after injuring her right thigh.
(Reporting by Shravanth Vijayakumar in Bengaluru; editing by Amlan Chakraborty)
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