In this question, we are asked to identify an example of a `horseshoe` shaped coral island in the neighborhood of India.
Option 1: Andaman and Nicobar islands - The Andaman and Nicobar islands do not have a horseshoe shape.
Option 2: Maldives - The Maldives is a correct answer as it is known for its beautiful horseshoe-shaped coral islands.
Option 3: Lakshadweep - Lakshadweep is also a correct answer as it consists of several coral atolls, including Minicoy, which has a distinctive horseshoe shape.
Option 4: Sri Lanka - Sri Lanka is not a correct answer as it is not known for its horseshoe-shaped coral islands.
Therefore, the correct answer is option 3: Lakshadweep.