The correct answer is option 2: Myanmar. The Naga hills, located in the northeastern part of India, serve as the watershed between India and Myanmar. A watershed is a geographical boundary separating the flow of water. In this case, it demarcates the areas where water from the Naga hills flows towards India on one side and towards Myanmar on the other side.
Option 1: China is incorrect because the Naga hills do not serve as the watershed between India and China. The Naga hills are located further south, sharing a border with Myanmar, not China.
Option 3: Bhutan is also incorrect because the Naga hills do not form the watershed between India and Bhutan. Bhutan is located further west and shares a border with India, but the Naga hills are not the geographical feature that separates the two countries.
Option 4: Bangladesh is incorrect because the Naga hills are not the watershed between India and Bangladesh. Bangladesh is located to the southwest of India, while the Naga hills are situated in the northeastern region.
In conclusion, the Naga hills form the watershed between India and Myanmar, as provided by the correct answer.