The current global market, as well as customers’ inclination for innovative products, makes new product development (NPD) activities more uncertain. In the era of Industry 4.0, organizations are being forced to adopt new approaches, such as agile new product development (ANPD). This approach has recently been identified as essential for innovative physical product development and aims for reducing both time-to-market and the resources required for the NPD. Hence, it is necessary to identify the dominant risk elements associated with agile new product development so that practitioners can ensure the approach's successful adoption. The goal of this research article is to identify risk elements through literature review along with expert opinion and then develop a framework using ISM-MICMAC analysis. Bearing in mind the Industry 4.0 scenario the framework was created using ISM methodology, and ten shortlisted risk elements were classified using their driving as well as dependence power. The analytical results demonstrate risk element “Corporate incompatibility risk” has the greatest driving power, while the risk elements “Supply Chain Management (SCM) risk”, “NPD process risk”, “Advanced technology risk”, and “Delay risk” have the greatest dependency power. The authors believe that this document will serve as a guide for ANPD and Industry 4.0 practitioners in identifying and mitigating adoption risks in advance. This could be the first attempt to identify ANPD risk elements in the background of Industry 4.0 and model them using the ISM-MICMAC methodology.