Cities worldwide are experiencing rapid urbanization and an increasing population, creating a pressing need for smart infrastructure to enhance citizen services. Dhaka, the capital of Bangladesh, faces similar technological and socio-economic challenges, making it crucial to transform it into a sustainable smart city. This research analyzes the opportunities and challenges of smart cities and Dhaka through SWOT and PESTEL analyses. The study employs a fuzzy rule-based inference system in a MATLAB simulation to calculate the smart city index based on parameters such as governance, transportation, waste management, utility management, healthcare, and industrial automation. The findings reveal that good governance has the highest impact on the smart city index, followed by transportation. The paper proposes a sustainable smart city transportation framework and management technique, outlining future research directions. The proposed framework is expected to impact socio-economic, technological, and environmental aspects positively.