The manufacturing sector is a fast-growing sector demanded by the increasing population. The adoption of information technology is a boon in the manufacturing industry. The industrial transformation from the third generation to the fourth generation has significantly impacted sustainable development. On account of this, different sectors are adopting industry 4.0 technologies to smooth their process flows. The industry 4.0 technologies implementation in the manufacturing sector will not only enhance its productivity, but also lead to sustainable growth. In this regard, this study intended to examine the challenges associated with adopting industry 4.0 technologies in the manufacturing sector. A thorough literature review was carried out from the Scopus database, and a list of ten important challenges was shortlisted for analysis. The article uses interpretive structural modeling to analyse the challenges of industry 4.0 and make a structural model between identified challenges. “Lack of employee skills” and “lack of technological infrastructure” were identified as the topmost challenges in adopting industry 4.0 technologies in the manufacturing sector. This study will enable decision makers, policymakers, and industrial practitioners to effectively analyse the challenges of I4.0 for its smooth adoption in the manufacturing sector. Practical implications of the study and future research directions were also highlighted in the article.