The building in the Malviya Nagar neighborhood in the southern part of the city had a restaurant on the ground floor and a hotel above. The predominantly residential area is densely populated and is popular with students and young professionals, AP reported.
The blaze was extinguished with the help of eight fire engines, and more than 40 people were rescued and taken to nearby hospitals, Delhi police said in a statement.
The cause of the blaze was not immediately known.
Images from the scene showed firefighters trying to douse the blaze as thick smoke billowed from the building. Some people trapped inside were seen hanging from windows and shouting for help as flames and smoke swept through parts of the building.
Local residents also joined rescue efforts, helping evacuate people trapped inside and carrying some of the injured to safety.
Some of the victims were foreign nationals who had travelled to India for medical treatment, local media reported. Many foreign patients travel to New Delhi for medical treatment and often stay in nearby hotels or residential accommodation during their visits.
Prime Minister Narendra Modi expressed his condolences over the deaths, his office said in a post on X. It also said that the families of those killed would receive 200,000 rupees (US$2,088) each in financial assistance.
Fires are common in India, where building laws and safety norms are often flouted by builders and residents.