The index monitoring new business fell to a six-month low of 51.6 from March's 53.5, prompting some firms to cut jobs.
Strong new business growth was the primary factor.
India's services industry expanded at its fastest pace in eight months in October as new business rose with discounting probably stoking demand, a survey showed on Wednesday.
The Nikkei India Manufacturing PMI dipped from 50.3 in November to 49.1 in December.
Services growth at 5-month low in Nov as confidence slumps.
Growth in India's manufacturing sector cooled to its slowest in 22 months in October.
Services sector slowed down in May on weak economic factors.
While manufacturing firms cut jobs for the first time in 20 months to sharply reduce costs, services providers continued their hiring spree.
The HSBC Manufacturing Purchasing Managers' Index fell to 51.3 in April from March's 52.1
The expansion in total new orders was supported by greater sales to international markets
On the other hand, jobs increased for the 10th straight month in the manufacturing sector, albeit only slightly
Firms hired additional hands to keep up with the production demand
The mismatch between PMI and core sector could also be due to the fact that while core sector is calculated year-on-year, PMI is calculated month-on-month.
The NITI Aayog's vice-chairman's charge holds ground.