Millions of children worldwide are engaged in labour that is hindering their education, development and future livelihoods; many of them are involved in the worst forms of child labour that cause irreversible physical or psychological damage, or that even threaten their lives. This situation represents an intolerable violation of the rights of individual children, it perpetuates poverty and it compromises economic growth and equitable development. The effective abolition of child labour is an essential element of the urban sustainability. Children residing in informal, unplanned settlements in or near India’s cities grow up in one of the most hazardous environments imaginable. Although food, services and infrastructure may be more available than is the case in rural areas, accessing them often requires cash payments that the poor cannot afford. Wealthier, more powerful groups tend to secure good quality health care, education and housing, leaving the poor and their children on the margins. India as a country is facing many of the problems and child labour is one of them. The paper attempts to understand the causes of child labour while carrying out case study of Azadpur Mandi area of Delhi. The study also tries to understand the impact of the child labour on working children and cities as a whole. The paper raises some important issues related to eradication of child labour and their overall impact on future sustainable cities of India.