Activity in India's services sector rose at its fastest pace in five months in December, data from a survey by Markit Economics and HSBC Bank showed Wednesday.

Based on a survey of around 400 firms, the HSBC Markit Business Activity Index grew 54.2 in December from 53.2 in November, staying above the borderline 50 mark which separates growth from contraction. It was India's second consecutive monthly growth for its services sector.

"Activity in the services sector picked up pace in December led by faster growth in new business, underscoring the resilience of the sector," Leif Eskesen, HSBC economist, said in a statement.

In September, the index contracted to levels below 50 and sunk in October to a further two-and-a-half year low of 49.1.

Both India's services PMI index and the new business sub-index were at their highest levels since July.

The new business sub-index rose to 55.7 in the December survey, from 52.3 in November, owing to improvement in demand.

The services sector includes the software services industry, of which more than 90 per cent of revenue is sourced from clients overseas.

The employment index, which expanded for the first time in six months, also added to the positive mood of December's survey.

India's manufacturing activity for December likewise jumped to 54.2, up from November's reading of 51.0. It was also India's fastest pace in six months.