The global fashion industry’s environmental footprint has heightened the urgency for sustainable fashion adoption, yet Generation Z (Gen Z)—despite high sustainability awareness—shows limited engagement. This study investigates the systemic barriers impeding sustainable fashion consumption among urban, digitally active Indian Gen Z consumers. Drawing on the Theory of Planned Behaviour and Resistance to Innovation Theory, the research identifies ten interlinked barriers, including lack of awareness, limited availability, price sensitivity, trend obsession, peer influence, greenwashing confusion, low perceived impact, convenience bias, brand loyalty, and inconsistent messaging. A mixed qualitative–quantitative approach employing Interpretive Structural Modelling (ISM) and MICMAC analysis was applied to 137 valid responses collected in June–July 2025. Findings reveal that lack of awareness and limited availability are foundational drivers shaping intermediate constraints—such as price sensitivity and low perceived impact—which ultimately influence entrenched behaviours like brand loyalty and trend fixation. The ISM hierarchy underscores the multi-level nature of resistance, while MICMAC classification highlights critical driving factors for targeted interventions. The study contributes to sustainable consumption theory by mapping structural interdependencies and offers actionable insights for policymakers, educators, and brands seeking to align Gen Z fashion choices with Sustainable Development Goals 12 and 13.