A question that confronts most economic historians of modern India is why the Indian economy was so backward and predominantly agricultural at the time of Independence. To answer the question one has to examine the pre-conditions that were available prior to the twentieth century along with the patterns of industrial growth achieved during the first half of twentieth century. The progress of the historical research on the issue of economic growth of India under the Raj has shifted towards the issues like scope for profitable investment within the economy, the limits of opportunity for entrepreneurship and the objective factors that constituted the economic environment, such as the size of market, the cost of production and the availability of essential technology and infrastructural facilities. The Purpose of this paper is not only to explore the current historiography on the issue of industrialization under colonial rule but also to look for the aspects that not only needa re-examination on the basis of recent researches but also demand a revision up to certain extent.