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The collapse of indigo production in Bengal was primarily due to exploitative practices by British planters, who imposed harsh conditions on local farmers. The introduction of synthetic dyes in the late 19th century further diminished the demand for natural indigo. Additionally, widespread peasant unrest, exemplified by the Indigo Revolt of 1859, highlighted the grievances of farmers against oppressive contracts, leading to decreased production and eventual decline of the industry. Economic shifts and resistance to colonial rule ultimately contributed to the industry's downfall.

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