The correct option is 1 only
Explanation
The state of the Indian industrial sector during the colonial period was characterized by the systematic de-industrialization of indigenous handicrafts and a slow, regionally skewed growth of modern industries. This structure was largely determined by the colonial government's economic interests.
Statement 1 is Correct:
The primary outcome of the colonial government's policies was the decline of the world-famous indigenous handicraft industries. This de-industrialization led to massive unemployment in the manufacturing sector and forced a large number of artisans to shift to agriculture, increasing the burden on the rural economy (overcrowding).
Statement 2 is Incorrect:
The modern cotton textile industries, which developed in the second half of the 19th century, were mainly dominated by Indian entrepreneurs. Furthermore, they were primarily located in the western parts of the country, specifically in present-day Maharashtra and Gujarat, not Bengal.
Statement 3 is Incorrect:
The jute textile industries were mainly dominated by foreigners (British capital). These mills were concentrated in the Bengal region (eastern India), particularly around the Hooghly River, rather than western India.
Key Takeaway:
Cotton Mills: Dominated by Indians, located in Western India (Maharashtra/Gujarat).
Jute Mills: Dominated by Foreigners, located in Eastern India (Bengal).