Nanocomposites were synthesized among citric acid, ethylene glycol and indole-3-acetic acid by condensation followed by incorporating silver nanoparticles (AgNPs) in a hydrogel. The formation of parent hydrogel and their nanocomposites were identified by Fourier transform infrared spectroscopy. The incorporation of silver nanoparticles in the hydrogel network, surface morphology and size of nanoparticles were established by ultraviolet spectroscopy, scanning electron microscopy and transmission electron microscopy, respectively. The thermal properties of the hydrogels were studied by TGA-DTA analysis. The parent hydrogel (ICE) and nanocomposites revealed a good pH-sensitive swelling behavior at acidic media than in basic media. In vitro examination of fungal activity revealed all prepared hydrogels as effective against Aspergillus fumigatus, Rhizopus oryzae and Candida albicans. Further, the antibacterial properties of the optimum sample were successfully evaluated against Gram-positive (Bacillus aureus, Staphylococcus aureus) and Gram-negative (Escherichia coli) bacteria. The prepared nanocomposites showed a higher antimicrobial activity than that of the parent hydrogel. Further, the radical scavenging ability of the hydrogel and nanocomposites were estimated using DPPH (2,2-diphenyl-1-picryl-hydrazyl) and nitric oxide radicals. The prepared nanocomposites with tuned antibacterial, antifungal and antioxidant properties can be used for wound healing, burn dressing, treatment of topical fungal infections and for other biomedical applications.