An uptick in new owders and softer rate of growth in the input costs, supported the growth.
India's services purchasing managers' index (PMI) touched a near four-year high at 54.5 in October compared to a reading of 52.0 in September.
A reading above 50 indicates expansion while a reading below 50 indicates contraction.
TradingEconomics.com said that "the reading pointed to a strongest pace of expansion in private sector activity that was the quickest in nearly four years as strong rise in new business underpins sharp activity growth while input costs facing service providers rise at a softer rate"
The Nikkei Services Business Activity Index was recorded above the 50-mark for the sixteenth straight month, markiteconomics, said, highlighting the ongoing growth in the sector.
"This pointed to a marked pace of expansion in the private sector activity that was the quickest in nearly four years," it added.
New orders, which expansed at a solid pace, faster than in September, supported the uptick. "The upturn was supported by greater client requests and improved demand conditions," it said.
However, unfinished business volumes rose for the fifth consecutive month. "Little-changed since September, the overall rate of backlog accumulation was solid. A similar trend was seen among manufacturers, where outstanding business rose solidly," the report said.
Despite the consistent growth over the months, service sector employment in October was unchanged over the month, with nearly all the survey participants reporting the same payroll numbers as in September.
"Indian services companies remained upbeat towards the 12-month outlook for activity but the overall level of sentiment was at a four-month low... Worries regarding fierce competition for new work, however, restricted confidence," market economics said.
Commenting on the data, IHS Markit's economist Pollyanna De Lima, said, "The service sector joined its manufacturing counterpart in offering a more upbeat level of performance this month, providing reassurance in the sustainability of the upturn of India's economy.
"Incoming work was the main driver of output growth, with survey respondents highlighting strong demand and improved market conditions," she added.
However, hiring still remains a concern. "...Sustained stagnant trend in workforces, with both manufacturers and service providers showing some reluctance to hire, is an underlying concern."
She said, "hopefully, the added pressure on capacity shown in the PMI surveys will translate into job creation as we move towards the end of 2016."
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