The fashion industry is a significant contributor to environmental degradation. Therefore, circular practices are increasingly being used in production to reduce the ecological footprint. Circular practices are a set of strategies and models for creating a closed-loop system in which resources are reused, repurposed, and recycled in order to minimize waste and environmental impact. The traditional linear model operates on the principle of “take, make, dispose,” while circular practices seek to extend the life cycle of products as much as possible in various ways. Circular practices also include innovative business models such as clothing rental, resale, and subscription services that encourage consumers to choose access over ownership. In addition, the use of sustainable materials such as organic cotton, recycled polyester, and biodegradable fabrics reduces the dependence on virgin resources and reduces the ecological footprint of clothing production. By leveraging advances in technology and promoting collaborative efforts across the value chain, the fashion industry can move towards a more sustainable future. The goal of this paper is to explore the circular model in the fashion industry, focusing on the challenges and opportunities specific to the sector. The industry’s significant environmental impact is exacerbated by fast fashion and the increased use of synthetic materials, which increase waste and pollution. The study delves into the concept of a circular economy, including reuse, recycling and upcycling, as an alternative to the linear fashion model. It identifies barriers to adopting circular models, including supply chain complexity, economic and managerial hurdles, and behavioral resistance. The paper also explores trends such as the rise of digitalization, AI, and technological innovations in materials, predicting these advancements could facilitate the industry’s green transition. Case studies from India, China, the UAE, Singapore, and the Philippines showcase regional approaches to circular fashion, emphasizing the role of government initiatives, innovative startups, and technological advancements. Despite progress, the research concludes that scaling circular practices requires overcoming challenges related to high costs, limited access to sustainable materials, and the need for widespread consumer adoption. Policy recommendations include investing in technological innovation, creating sustainable material standards, and fostering international collaboration for a more sustainable global fashion industry.