The Cypriot, who won his first career ATP title in Beijing nine days ago, picked up a shoulder injury in practice on Sunday and could be sidelined for up to three weeks.
"I can't serve and I can't really return, so I won't be able to play," he told a news conference.
"It's getting better but I'm not 100 percent, not even 70 percent."
Baghdatis, 21, said he had played his best tennis in Asia and was disappointed not to be competing in Bangkok.
"It's how life goes," he said. "I'm disappointed because I'm lucky in Asia and it's where I play best.
"I came here and won my first title and I've played really well before."
Baghdatis was the second seeded player to withdraw from the competition in the last few days after Australia's Lleyton Hewitt pulled out after aggravating a knee injury.
In Tuesday's early first round matches, seventh seed Robby Ginepri of the United States went through to the next stage after defeating Denmark's Kenneth Carlsen 6-3, 6-4.
"I played the best I have in a long while," Ginepri told reporters. "I took some time off after the U.S. Open and I've worked particularly hard coming into this."
Britain's Alex Bogdanovic beat Yeu-Tzuoo Wang of Taiwan 6-7, 6-4, 6-4, while Russia's Mikhail Ledovskikh advanced to the second round after defeating Sweden's Michael Ryderstedt 6-1, 7-6.
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