Influence of Industry 4.0 technologies on circular economy adoption and sustainability performance: a structural equation modeling investigation of Indian manufacturing firms

Purpose This study aims to examine how Industry 4.0 technologies enable circular economy adoption and sustainability performance in Indian manufacturing firms, and elucidates the conceptual distinction between Industry 4.0, which represents the operational technology bundle examined empirically, and Industry 5.0, which is treated as the broader human-centric, resilient and sustainable strategic horizon within which these technologies are deployed. Design/methodology/approach Survey data from 378 Indian manufacturing organizations were analyzed using partial least squares structural equation modeling. The model tests the effects of a higher-order Industry 4.0 construct, comprising cyber-physical systems, Internet of Things, big data, additive manufacturing and cloud computing, on circular economy adoption and sustainability performance. Findings Industry 4.0 technologies positively influence circular economy adoption, and both Industry 4.0 and circular economy implementation contribute significantly to sustainability performance. The results suggest that digital connectivity, analytics and process integration help firms operationalize circular practices and improve economic, environmental and social outcomes. Originality/value This study contributes by separating the operational logic of Industry 4.0 from the broader normative vision of Industry 5.0 and by empirically demonstrating the role of digital technologies in enabling circular economy adoption in an emerging-economy manufacturing context. Marketing and consumer engagement are repositioned as managerial and future research considerations rather than empirically tested mediating constructs.