The HSBC India Services Purchasing Managers' Index (PMI), compiled by S&P, rose to 59 in December, up from 56.9 in the month prior. The figure had stood at 58.4 in October.
The growth is still slower than in July, when India's PMI was at 62.3.
A reading of 50 separates expansion from contraction.
India's services PMI has expanded for 29 straight months, remaining above the contraction point.
The improvement in service sector growth comes on the heels of slowing manufacturing, which in December grew at the slowest pace in 18 months.
India's services sector, one of the fastest growing in the world, contributes to over 50% of its GDP.
The rise in services in December will help. India meet its targeted economic growth, which the Reserve Bank of India last month raised to 7% for FY24, from its earlier estimate of 6.5%.
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