Rampantly growing urbanization poses global sustainability challenges, to address which the Sustainable Development Goals (SDGs) were introduced in 2015 by the United Nations. SDG 11 “Sustainable Cities and Communities” mainly focuses on urban settlements and aims to make cities and human settlements more inclusive, safe, resilient, and sustainable for improved quality of life. Sustainable Smart City (SSC) planning, under SDG 11 “Sustainable Cities and Communities,” strives for a comprehensive approach, focusing on all social, environmental, and economic aspects to help develop a city holistically without degrading the environment and losing the local identity by integrating smart concepts. Nevertheless, every city is unique and is characterized by its geography, cultural diversity, people, climate, local economy, land ownership, and availability of resources, and hence requires contextually appropriate strategies. This is resonant in the Northeast region of India despite its rich natural resources and cultural diversity, where cities are less developed compared to the other parts of the country, and SSC strategies applicable in other cities have not been able to address the challenges of this region. Thus, to understand the current scenario of the Northeast ground-up and correctly identify the key challenges and decision-making criteria, the grounded theory methodology was used in this research to construct contextually appropriate hypotheses and theories through collecting and analyzing data. For the same, a qualitative study of the ongoing projects and challenges faced by the Guwahati Smart City Limited (GSCL) was undertaken with the stakeholders of the smart city mission of India, and this paper presents the analysis and resulting possible directions which may help in designing and planning smart cities in Northeast India.