Option 1: Both statements are individually true and Statement II is the correct explanation of Statement I. This option suggests that both statements are true, and Statement II correctly explains why India`s share of world manufacturing output declined. However, Statement II does not provide any explanation or reasoning for Statement I. It simply presents a separate fact that India did not experience an absolute decline in production during colonial rule. Therefore, this option is incorrect.

Option 2: Both statements are individually true, but Statement II is not the correct explanation of Statement I. This option acknowledges that both statements are true, but it correctly states that Statement II does not explain Statement I. Statement I discusses the decline in India`s share of world manufacturing output, while Statement II focuses on the absence of absolute decline in production during colonial rule. These two statements address different aspects and do not provide a direct explanation for each other. Therefore, this option is correct.

Option 3: Statement I is true, but Statement II is false. This option suggests that Statement I is true, meaning that India`s share of world manufacturing output did decline during the 19th and 20th centuries. However, it states that Statement II is false, implying that there was an absolute decline in production in India during colonial rule. This