The correct answer indicates that only the second statement, "Textile and textile articles constitute an important item of the trade between India and Bangladesh," is correct.

Statement 1 suggests that the Indo-Sri Lanka trade has consistently increased in the last decade. However, trade figures can fluctuate due to myriad factors including political changes, economic policies, and changes in demand or supply. This makes it possible that this statement may not be always accurate.

Statement 2 is correct, which implies that textiles and related products play an important role in trade between India and Bangladesh. This is consistent with the fact that both countries have strong textile industries and frequently engage in cross-border trade of these goods.

Statement 3 asserts that Nepal has been India`s biggest trading partner in South Asia over the past five years. This may not be true because India has sizable trade with other countries in South Asia like Bangladesh and Sri Lanka which can surpass the trade with Nepal.