Even if India and Pakistan face each other in the T20 World Cup, the match will be taking place in neutral territory and the Indian government will be having no objections. The ban covers only bilateral series. The Indian government hasn't given permission for the Indian team to visit Pakistan for the bilateral series and similarly they are not allowing the Pakistanis to visit India. The Pakistan Cricket Board (PCB) has raised complaints on multiple occasions related to this, to the ICC. But the situation is unlikely to change anytime soon.
The conflict between India and Pakistan has been going on since the partition. And there is no possibility of resolving the conflict soon. They have met 6 times in the last 6 years and all the matches have been held in a third country. The two teams will also face a third country in the T20 World Cup.