PS : Only Test ranking matters in cricket. T-20/ODI rankings are jokes.
ODI & T20 rankings are still important as they reflect a team's performance. I admit that I am not that great at judging the reason for your reply, what I understand is simple, playing nation in test format is saturated. When you check the number of teams in those formats it is big, and it will become bigger in the T20 format considering the popularity of this format. Only hardcore cricket fans like yourself would be enjoying test cricket while the world gets crazy about T20.
I would say that the Indian team has gained a major psychological advancement before the World Cup. Cricket has been a game of mind and skills, you cannot deny how it affects the mind of an Indian fan when India plays against Pakistan. Some of what same mind influence happens when players play against each other, one of the best examples is Kohli and how he has been playing this mind game so effectively.
Pakistan, Australia and South Africa stand at 2,3,4 positions respectively.
If these guys organize 3 back to back series with the likes of Zimbabwe, Ireland or Netherlands then they will top the ODI ranking and if they manage to clean sweep then potentially remain at the top for at least 1 year.
My overall point is a strong test nations like Ind +Eng +Aus hardly field their strong whiteball team against every team. They always try their bench strength (you can notice this even in the current series), and you can add Kiwis as well in this mix.
In contrast, teams like Pakistan + Sri Lanka +Bangladesh always go with their full strength team, unless there is some injury issue. For ex: Pakistan faced literally second string teams from Aus, NZ in the last year or so and add some WI + Netherlands +Afghanistan bilateral series, result? They were the number 1 team for a week or so.