The incident comes amid widespread outrage in recent months over sex crimes across India.
The child was lured away from her mother and her friend by a man in a park in Raipur, the capital of Chhattisgarh state, on Friday, railway police superintendent K.C. Agrawal told CNN.
Police suspect that man then took her on board a train and sexually assaulted her in the toilet compartment of a carriage sometime between Friday night and Saturday morning.
The suspect “was apparently known to the friend of the child’s mother,” Agrawal said.
The alleged attacker, around age 40, remains at large.
Police teams, Agrawal said, have fanned out to capture the suspect, whose identity has not been disclosed.
The victim, who was found on Saturday morning at a train station, is under treatment at a hospital, and her condition is stable, police said.