Is it right to cite a retracted research article? I was doing literature review and I came across a paper which is in the area of my interest but has been retracted because of duplicating the figures (technical drawings) of other papers.

Can I cite this paper in my literature review?

Also, is it ethical to work on the topic of this retracted paper?
Dissenting View: You Absolutely Can Cite a Retracted Paper
Research is about telling the truth about facts of reality.  You can cite any fact of reality you want if it is relevant to your research; if someone says something, you can report that they said it.  You can cite a published academic paper; you can cite a newspaper article; you can cite a letter; you can cite a Post-It note or a tweet; you can cite that thing your neighbour said to you over the back fence when he got really drunk that time.
Generally researchers cite claims/information from academic papers as a source of authoritative information that has been through the process of peer review.  However, there is certainly no rule that confines academics from citing information from other sources, including sources that have not been through peer review, or have been through it, but have later been retracted.  There are many cases where it might be useful to cite a paper that has been retracted.  There may be cases where you want to cite something from a retracted paper, where the part you are citing is undisputed, and the cause of the retraction had nothing to do with the part you are citing.  There may be cases where you want to cite a claim that has been retracted, but you still think the claim is relevant despite its retraction.  There may even be cases where you want to cite a retracted paper because you want to talk specifically about it having been retracted (e.g., if you are doing research on how often and why academic papers in some field are retracted).
Now, if you cite a retracted paper, it is proper practice to disclose to your reader that it is a retracted paper, and this should be done in your bibliography where you list the citation details, and should probably also be done in your main body text (e.g., Johnson 2011 - retracted).  If you are citing something from the paper that is a reason for the retraction, you should make it clear to your reader that you are citing a claim that has been retracted (and hence has not passed peer review).
The notion that retraction of a paper precludes you from citing it has several obvious absurdities.  First, it would make research on retracted publications extremely awkward, if not impossible.  Secondly, it would implicitly require that other sources of material that have not passed peer-review could also not be cited.  Thirdly, it is tantamount to claiming that writers/editors have the prerogative to preclude you from reporting what they have written.  If a politician says something scandalous, and then says &quot;retracted!&quot; does that mean you're not allowed to report it in your research?