I have been offered a position as a contractor for Emirates NBD with a monthly compensation of AED 21,500. I am currently part of a family of three (my spouse, child, and me; my child is not of school-going age). Given the cost of living in Dubai, would this be considered good compensation for a family of three? My current fixed package in India is ₹26 lakhs per annum , also any possibility to switch in dubai? after say an year?

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I would suggest you stay in India. 21.5k is too low for your current compensation. Don't think below 35 40k

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Yes, this is low-balling.

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