Williams, the world No. 1, was unable to play in her semifinal matchup due to a right knee injury, resulting in third-seeded Halep winning via walkover.
"Today I was struggling to even walk," Williams said. "I promise to come back next year."
Williams revealed she injured the knee at practice a couple of days ago.
At the 2001 BNP Paribas Open, Serena and her older sister Venus were booed by angry fans who accused them of match fixing after Venus withdrew from a scheduled semifinal match. In an article published by USA Today soon after, Serena's father, Richard, said he was a victim of racial abuse as he watched Serena defeat then 17-year-old Kim Clijsters.
Serena then boycotted the tournament until her return this year.
Jankovic, the 2010 titlist at this event, overcame 24th-seeded German Sabine Lisicki 3-6, 6-3, 6-1 in a match that lasted nearly two hours at Indian Wells Tennis Garden.
The 18th-seeded Serbian dropped her first set and was down twice in the second, but rallied to win 10 of 11 games and saved four break points, two of which came in the third set, to cruise into the final.
Halep holds a 3-1 edge over Jankovic in four career matchups.