The Indian team that last played a Test match in January against Australia, has swapped places with Pakistan.
Pakistan, despite a 0-1 defeat in the three-Test series, which finished in Sri Lanka on Thursday, have moved up to fourth position, pushing M S Dhoni's men down to number five.
Meanwhile, England extended their lead as top Test team after gaining 122 ratings points, while Australia moved to the second place.
Although South Africa has fallen to third spot, they can still leapfrog into top position if they manage to win the three-match Test series against England, which begins at The Oval on July 19.
If South Africa win the series 1-0 or 2-1 it will be level on ratings points with England but when the rankings are calculated to a fraction of a decimal point then Graeme Smith's team will have the edge.
A drawn series or a 1-0 win will mean England retain the number one position and if Andrew Strauss's side were to win 2-0 or 3-0 then South Africa would tumble to fourth spot.
Lower down the table, West Indies have fallen below New Zealand, who are now placed at seventh position.