Urban development initiatives in India are largely shaped by a ‘patchwork of programmers’ launched periodically by the Government of India. Recently, the Indian government has launched multiple urban transformation programmes aiming at smart city development, urban renewal, and heritage development. But, India’s urban policy interventions lacks effective mechanisms for measuring the impact of such programmes over time. Indicator systems can provide insight into local urban challenges and issues and offer a basis for measuring urban progress as a result of public investments. Although there are multiple global indicator facilities available for adoption, considerable challenges remain in selecting an appropriate set of indicators for local conditions. With Indian urbanisation intensifying and an accompanying proliferation of urban development programmes, there is an increasing need for a set of indicators suited to local context. A local approach can objectively measure the existing performance of Indian cities vis-a-vis quality of life and sustainability, and can evaluate the outcome and benefits of new local urban development programmes as they are implemented. To address this emerging need, this research aims to provide a bridge between local urban performance and the capacity to meet local and global standards. By the application of factor analysis (Principal Component Analysis) on 59 indicators chosen from various urban sectors, this study attempts to derive the most significant factors to measure the performance of 98 Indian cities and assess their potential to become sustainable smart cities. The study enhances the selection and development of policies by city makers. It also establishes an approach to develop urban typologies for different Indian cities. Such a categorisation makes the bewildering range of Indian cities and their challenges easier to comprehend and address.