Defending champions India manage only 118 chasing a modest 130 set by SA
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Sri Lanka, the group F champions, take on the West Indies in the other semi-final at the Oval in London on Friday.
India, who won the inaugural event in South Africa two years ago, collapsed after a bright start when openers Gautam Gambhir and Rohit Sharma put on 48 by the sixth over. The Indians, 55-1 at one stage, lost four top order wickets for 14 runs against a seven-man South African attack.
Indian captain Mahendra Singh Dhoni highlighted his team's poor batting display by being run-out off a wide ball from Morne Morkel when Yuvraj Singh refused his call for a sharp single. Off-spinner Johan Botha removed Gambhir in his first over and Suresh Raina in his second, and also dismissed Harbhajan Singh at the end, to finish with three for 16.
A.B. de Villiers starred in the field with three catches, while fast bowler Dale Steyn claimed two wickets in one over to hasten India's end.
India's chase effectively ended when Yuvraj, who made a run-a-ball 25, was given out caught at the wicket off Steyn in the 19th over after the umpires took the help of the TV official.
The Indians won just two preliminary matches against Bangladesh and Ireland, while losing all three Super Eight games against the West Indies, England and now South Africa.
Dhoni's men, who have been on the road since February, will depart for the West Indies after the tournament to play four one-day internationals.
South Africa, who elected to bat on a slow wicket, struggled against the Indian attack to make just 130-5. De Villiers top scored with 63 off 51 balls, but the Proteas made painful progress with no boundaries scored between the sixth and 13th overs. Dhoni used eight bowlers to fill up the 20 overs, with five of them picking up wickets as the Proteas attempted to increase the run-rate.
Skipper Smith was the only other batsman besides de Villiers to cross 20 as South Africa managed just 32 runs in the last five overs.
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