The rise of globalization and digitization provoked textile and apparel industries worldwide to change their traditional business models. The textile and apparel manufacturing industries are ushering towards adopting novel concepts, viz. smart technologies (ST) due to the advent of industry 4.0 and circular economy (CE) to make their supply chains resilient, sophisticated, and sustainable. This study attempts to identify and evaluate the CE-ST barriers in the Indian Textile and Apparel industries. Eleven significant barriers to CE-ST adoption are identified through an extensive literature review and further validated through a validatory survey using industry experts. This paper utilized a novel form of interpretive structural modeling (ISM) by integrating it with the neutrosophic approach, i.e. Neutrosophic ISM, to compute the driving and dependence power of identified CE-ST barriers. The findings indicate that ‘unawareness' of adoption policies’ and ‘lack of government support and subsidies’ are critical obstacles to adopting the CE-ST framework in the Indian textile and apparel industries. This research work is the first-of-its-kind to identify and analyze the critical CE-ST barriers in textile and apparel industries and propose strategies to mitigate them. This study offers key strategies to overcome CE-ST barriers to aid practitioners, stakeholders, policymakers, and industry leaders in effectively implementing CE-ST practices in TAI.