Exploring enablers and challenges in building smart circular economies through industry 4.0 technologies in South Asia

The adoption of Industry 4.0 (I4.0) technologies and Circular Economy (CE) principles is transformative for developing sustainable industrial systems. Although both fields are gaining prominence in global policy and business circles, the convergence of these two areas has not been extensively studied, especially in emerging economies. The current research aims to explore the enablers and barriers to developing smart circular economies using I4.0 in India, Sri Lanka, and the Maldives—three distinct South Asian countries with different industrial and sustainability priorities. In a qualitative study, 15 stakeholders from the manufacturing, agriculture, and tourism sectors were interviewed in depth. The thematic analysis revealed six themes: digital preparedness, enablers, barriers to integration, CE practices within sectors, consumer behaviour, and sustainability performance. The findings suggest that, despite a good level of awareness about I4.0 and CE, their integration remains limited, mainly due to cost barriers, infrastructure issues, policy inconsistencies, and digital literacy challenges. The influence of contextual enablers—including donors, public-private collaboration, and regulatory compatibility—is highlighted, with sectoral and cross-country differences noted. The study advances understanding of digital sustainability transitions by providing cross-national and cross-sector insights into operationalising new circular models in the Global South. It also offers a conceptual framework and policy-oriented innovations for policymakers, industry leaders, and development partners, thereby supporting efforts to accelerate sustainable, digitally enabled transformation.