Australia overtook India when the ICC updated its rankings earlier this month.
As per Gambhir, India have had a greater impact on the Test circuit in the recent past with away series win down under and in the Caribbean while he feels Australia have been 'absolutely pathetic' in the subcontinent.
Virat Kohli and company were heading the list for 42 months and the Aussies overtook them earlier this month when the ICC updated its rankings, abolishing the points that teams had accumulated from 2016-17 season.
In fact, the updated rankings pushed India to the third spot while New Zealand attained the second position.
"No, I am not surprised (India slipping to No. 3). I don't believe in points and ranking system. Probably the worst was there in the World Test Championship... that you win the same points when you win a Test match away from home. That's ridiculous," Gambhir said during the Cricket Connected show on Star Sports.
"Yes, absolutely. 100 percent. If you have to see from the overall impact point of view, India have lost series away from home but won against Australia. Hands down, they have been the most competitive side. They won a Test in South Africa, won a Test match in England... not many countries have done that.
"For me, India should be there (No. 1) because Australia... I have serious doubts On what front have you given Australia the No. 1 ranking? They have been absolutely pathetic away from home, especially in the sub-continent," he added.
Australia might have replaced India from the No. 1 spot in ICC Test rankings but the latter are still leading the World Test Championship points table. No wonder, there is a lot of anticipation around India’s tour down under later this year, where Kohli and his men will face the Tim Paine-led Australian side in four Tests.
At present, however, the Border-Gavaskar Trophy 2020-21 is under threat given the travel restrictions across the globe due to COVID-19 outbreak.
Amid the crisis, BCCI treasurer Arun Dhumal has said that Team India are ready to quarantine themselves in Australia for two weeks so that the series scheduled for December-January goes ahead.
Lauding the BCCI for agreeing to tour Australia, Gambhir said: "Good on the BCCI. Fabulous. This is a very, very positive sign. They are probably looking at the bigger picture, it will change the mood of the country. Winning the series is a different thing, it's very important but it will probably change the mood of both the countries as well. Not only India but probably for Australia.”
"When BCCI is there... they are probably the richest board they have got to be statesman as well. If India are to Australia, then I have a lot of respect for the BCCI," he concluded.