The correct answer is option 3, which states that both Statement 1 and Statement 2 are correct.

Statement 1 suggests that the first telegraph line in India was set up between Kolkata and Diamond Harbour. This is a correct statement. Indeed, the first operational telegraph line in India was laid between Kolkata (formerly known as Calcutta) and Diamond Harbour in 1850.

In Statement 2, it is mentioned that the first Export Processing Zone (EPZ) in India was established in Kandla. This statement is also correct. Kandla was the site of the first EPZ in India, set up in 1965. This was done with the aim to promote exports and generate employment in the country.

So, the best answer choice for this question is option 3, which indicates that both the statements are correct.