Federer, in his first tournament since March, was trailing Nadal by 100 points at the start of the week and is guaranteed of taking the top spot on Monday regardless of how Sunday's final goes.
Prajnesh, who qualified into the tournament and stunned world number 23 Denis Shapovalov in the opening round, lost to Guido Pella 6-7(4) 4-6.
Nadal, who certainly enjoys playing on clay and has amassed an incredible 53 clay court titles in his career, teased Roger Federer for being `contradictory` over his decision.
The American had just won the biggest title of his 14-year career, holding every service game and rallying past Alexander Zverev in the finals.
The Serbian lasted barely an hour at a tournament he has won six times, losing his opening match Friday in the Miami Open to Benoit Paire, 6-3, 6-4.
The 36-year-old Swiss great already has the record for most weeks as the ATP World Tour's No. 1 player (302) but he has not held the top spot since late 2012.
With the win, the 25-year-old Indian has now set up a clash against Lee Duck-hee of South Korea for a place in the summit showdown.
The 112-ranked Bhambri, who qualified for the Australian Open, will be looking for some momentum ahead of the long season, which also includes a Davis Cup tie against China.
The top-seeded pair of Paes and Joe Salisbury overcame Americans Austin Krajicek and Jackson Withrow 7-6(3), 6-4 in the semifinal.
Yuki beat second seed Spaniard Adrian Menendez-Maceiras 6-2, 6-4 in the first semifinals that lasted one hour and 39 minutes.
Left-handed Sharan and his American partner Scott Lipsky outplayed the local wild card pair of Jui-Chen Hung and Cheng-Yu Yu 6-1 6-4 in just 50 minutes.
Burnie (Australia): India's struggling singles star Somdev Devvarman suffered yet another first round defeat and this time against a player who is ranked outside the bracket of 1600.Third seed Somdev, competing in a USD 50,000
Kolkata: Fresh from winning the Chennai leg, Yuki Bhambri advanced to the second round, even as the other two Indians Saketh Myneni and Vishnu Vardhan made quiet exits in the USD 50,000 ATP Challenger at
Tashkent: The second seeded Indian doubles pair of Purav Raja and Divij Sharan defeated Israel's Dudi Sela and Amir Weintraub by 5-7, 6-3, 13-11 on Friday to earn a berth in the doubles final of
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