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.
On the job front, Indian service providers continued to add to their payrolls and the sector witnessed the second-strongest increase in employment since March 2011.
Manufacturing growth in India lost momentum in February.
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.
However, predictions that economic conditions will normalise after the elections underpinned optimism regarding the outlook and supported a stronger upturn in employment.
The recovery in the Indian services sector was sustained in November as new work orders supported business activity growth and the first rise in employment in nine months, a monthly survey said on Thursday.
The coronavirus outbreak has brought a large part of the world's second-largest economy China to a standstill and its impact has been felt across industries.
New businesses have been secured from the public and private sectors, as well as domestic and international markets.
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.
The seasonally adjusted Nikkei India Services Business Activity Index fell to 50.2 in May, from 51.0 in April, pointing to the slowest growth rate in the current 12-month stretch of expansion.
Services sector slowed down in May on weak economic factors.
A reading above 50 represents expansion while one below means contraction.
Regarding employment, the manufacturing sector hiring remained broadly unchanged.
A reading above 50 indicates expansion while a one below this level means contraction.
The Nikkei Markit India Manufacturing Purchasing Managers' Index (PMI) -- an indicator of manufacturing activity -- declined from 52.5 in April to a three-month low of 51.6 in May.
The Nikkei India Services Purchasing Managers' Index (PMI), which tracks services sector firms on a monthly basis, stood at 48.7 in January, as against 46.8 in December 2016.
The main factors contributing to the above-50.0 PMI reading were growth of both new orders and output as market conditions returned to normal and led to subsequent improvement in demand.
The Nikkei Markit India Manufacturing Purchasing Managers' Index (PMI) -- a gauge of manufacturing performance -- fell to 52.3, down from October's 22-month high of 54.4.
The HSBC Manufacturing Purchasing Managers' Index fell to 51.3 in April from March's 52.1
Supported by greater demand from both domestic and external markets, total new business rose at the fastest pace since March
The Nikkei India Manufacturing Purchasing Managers' Index (PMI) stood at 47.9 in July, down from 50.9 in June, its lowest mark since February 2009, and highlighted the first deterioration in business conditions in 2017 so far.
A reading above 50 denotes expansion while one below means contraction.
The survey noted that advertising campaigns supported the increase in new work growth in the sector amid competitive pressures.
Service providers' confidence with regard to the 12-month outlook for business activity remained positive.
During March, the rate of inflation slowed to the weakest in four months and was below the long-run survey average
The Nikkei Markit India Manufacturing Purchasing Managers' Index increased to 50.7 in February
While manufacturing firms cut jobs for the first time in 20 months to sharply reduce costs, services providers continued their hiring spree.
The services sector had slipped into contraction in July as confusion caused by the GST rollout triggered a dip in new business orders.
The expansion in total new orders was supported by greater sales to international markets
Factory growth picked up in May.
Companies are also worried about inflationary pressures building up.
The Nikkei India Services PMI posted above the critical 50.0 level, which separates growth from contraction, for the fourth month running in May.
The improvement in business conditions promoted job creation, while confidence towards the year-ahead outlook for activity was at a four-month high during March.
On the other hand, jobs increased for the 10th straight month in the manufacturing sector, albeit only slightly
With factory production, activities across the private sector saw the biggest drop in over three years
Currency scarcity weighed on manufacturing performance where growth of new work flows slowed
A reading below 50 means contraction in the sector.
Sluggish rise in new business inflows and a cautious approach to costs reportedly led Indian manufacturers to shed jobs in September.
A reading below 50 means contraction in the sector.
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