However, Lanka leapfrogged England into fourth place and is now just one ratings point behind India as the series result earned Mahela Jayawardena's side five points but cost Anil Kumble's men four ratings points.
India entered the series with 113 points in their kitty but slipped to 109 after the loss.
However, if India beats Australia 3-0 in the home series scheduled to be held in October this year, it will leapfrog South Africa into second place on 118 ratings points and will trail Ricky Ponting's side by just nine ratings points.
As Sri Lanka will not play any more Tests until May next year, it will pin its hopes on Australia to put it ahead of India.
Ricky Ponting's side will beat India by a similar margin then Kumble's men will drop behind Jayawardena's side by one ratings point.
India can further reduce that gap to seven points if it wins the two-Test series against England later this December as a 2-0 win will take it to 120 ratings points against Australia's 127.
South Africa retained its second place in the championship table after earning one ratings point for its 2-1 victory over England which dropped two ratings points and slipped to 104, four behind third-placed Sri Lanka and four ahead of sixth-placed Pakistan.