Hemant,
You should use both Workflow as well code list restriction for your requirement.
From workflow, you set like If Country = India then set the default value 'Bangalore".
In Code list restriction, you control like If BANGALORE is selected then only two Channai and Hyderabad should be enabled from code list mapping.
This is how you will be able to control selection based one field based on other field.
Hope this will solve your issue.
Regards,
~anil poply