Hi @sathishkumar_sunmugavel
Could you please confirm if it’s recommended to use the SysTick timer for this purpose? If so, how can I utilize it correctly?
Yes, using SysTick for timeouts if perfectly fine. If you want to use OsIf, you need to configure it in the BaseNXP component. Please refer to this community post: Solved: Delay function using OSIF - NXP Community.
You can set the timeout method inside the I2C driver component to the OSIF counter system:

This timeout is implemented in the Lpi2c_Ip_MasterSendDataBlocking function from the RTD package.
Also, is it appropriate to use SysTick instead of dedicated hardware timers in this scenario?
This depends on your application. By using a dedicated timer (like PIT), you can save some CPU overhead, however, if this does not have great effect on your project, using the OsIf module can be simpler.
Best regards,
Julián