The present state of global economic disparity is alternatively explained by two phenomena of previous centuries. According to the mainstream school of thought, the industrial revolution in Great Britain during the second half of the eighteenth century and its subsequent spread to the European Continent and North America thwarted the marketing edge of industries of the rest of the world, and thus led to uneven economic progress. Challenging this thesis of market failures, neo-marxian writers like Andre Gunder Frank, Samir Amin and Arghiri Emmanuel, to name a few, centre their argument on the growth of the world capitalist system that created a colonial milieu across Asia, Africa and Latin America in previous centuries. They underscore that the ‘core’ capitalist countries in Europe and North America developed an exploitative economic relationship with the ‘peripheral’ colonial countries, which caused deindustrialization in the latter, and hence their economic backwardness. This study intends to empirically verify these competing hypotheses of deindustrialization. Bengal is our study area. It is referred to time and again in the literature of economic theory. Adam Smith (1937: 17-21), for example, described its context while developing his masterpiece theory of the division of labour as an explanation for the wealth of a nation. Karl Marx (1887: Ch. 33) also referred to Bengal in his deliberation on the genesis of industrial capital.1 Certainly, it is a point of reference in the literature of the British industrial revolution shows how technological innovations ushered in global industrial supremacy for Great Britain (Landes 1966: 275). But there is confusion surrounding the concept of Bengal as a geographical entity in history. It is indeed an ancient seat of civilization, dating back to before the Common Era. But the province of Bengal, as it stood under the governance of the English East India Company, had not been a cohesive geographical unit over the past millennia. Different sovereign kings ruled over it, sometimes by segmentation or else in annexation with neighbouring territories. Consequently, we first define in section I below the geographical extent of Bengal that comes under the purview of this study, and then briefly introduce its political history. Section II describes in brief various theories tending to explain deindustrialization in colonial economies. Section III introduces the basic approach of this study.