"The test reports are fine and he is in normal health," said a statement by a panel of five doctors at the Postgraduate Institute in Chandigarh, 145 miles north of New Delhi.
The Karmapa, who fled his Chinese-controlled homeland in December, was admitted to the hospital on Tuesday. Reports said he was suffering from heatsroke.
Since arriving in India in January, he has been living in Dharmsala, the headquarters of the Dalai Lama's Tibetan government in-exile.
He is revered as the 17th incarnation of the Karmapa, the third most important leader in Tibetan Buddhism. The Dalai Lama has asked the Indian government to allow the Karmapa to remain in the country.
Many Tibetan patients in the hospital lined up outside the Karmapa's room to be blessed by him. Tibetan leaders and students have arrived in Chandigarh from around India to pray for his health.
The Karmapa, who heads the Kagyu school of Tibetan Buddhism, reached India on January 5, and has since then been felled by the hot Indian weather, the Star TV news network said.
The Karmapa reached the northern Indian hill town of Dharamsala after a dramatic trek out of Tibet across the rugged Himalayas.
The Karmapa's importance lies not only in his position as the head of the Kagyu sect, but also in the fact that he is recognised by the Chinese government, as well as the Dalai Lama.
His escape from Tibet has been an embarrassment for China, which insists it allows religious freedom in Tibet yet arrests Tibetans for displaying photographs or otherwise publicly proclaiming loyalty to the Dalai Lama.
His arrival in India has also placed New Delhi in a difficult position, as it seeks to balance its traditional support for Tibetan exiles against its desire to improve relations with Beijing.
India is home to some 100,000 Tibetans.