Manufacturing is found to be crucial for the globally industrialized countries whereas its impacts on environment is a concern. Competition worldwide has challenged manufacturing industries with severe economic and environmental pressures, out of which resource scarcity is the most severe. Therefore, since Circular Economy (CE) mitigates these sustainable development challenges, a need to move from the linear “take-make-use-dispose” process to a CE is generated by adopting innovative business models which are called circular business models (CBM). However, a wide gap can be seen between how CE is conceptualized in the literature and how the real life practitioners in India face barriers in realizing it. Hence, the purpose of this thesis is to explore and examine in detail, the various barriers to the adoption of CBMs and thus, creating a shift towards CE among manufacturing firms by exploring challenges faced by practioners in India from various perspectives of the company and the external actors influencing the company and triangulate the barriers found out in the findings with the barriers from the existing literature with an aim of shrinking the literature gap mentioned previously. To fulfil the aims and objectives in this thesis, an extensive literature review is conducted to accumulate information about what information already exists about Sustainable Development (SD) in developing context, Business Model Innovation (BMI) and CE with its barriers. Further, an in-depth case study is conducted on Shree Renuka Sugars Limited (SRSL), which is a sugar manufacturing company in India who practice circular economic principles by achieving resource efficiency through conversion of by-products and wastes into new forms of value. Interviews are conducted on the case company to explore the barriers from the perspectives of the company staff as well as from the perspectives of external actors who influence the company by thinking of the company as a system dependent on its surroundings. Apart from this, additional secondary data has been researched which is used to triangulate with the findings in the later part of the thesis. The findings uncover that the challenges faced by the company are complex, diverse and multidimensional. These identified challenges are clubbed under four dimensions, that is, the barriers from the government, barriers from the supply chain, barriers from financial perspective and barriers from the organizational structure and culture. It was seen that CE was practiced differently in this context than conceptualized in the literature and therefore, other conditions along with this created new barriers for the firm. Also, different opinions were found from different people who were interviewed. This thesis aimed to fill the literature gap on how CE is conceptualized in the literature and how practitioners in India face barriers. The identified barriers in Indian context although not significantly different from the ones in literature yet has tremendous impacts when applied to manufacturing scenario within India. This further leads to also conclude that while all the barriers are interconnected, meaning that they depend on each other extensively, some barriers are more crucial than the other barriers in the Indian context as compared to the literature.