Local communities of merchants were known as kudirai chettis during the the Vijaynagar Empire. The main item traded by them was:

Horses

The correct answer is Option 2 - Horses

Kudirai chettis were horse merchants who were involved in trading horses.

As warfare during these times (medieval period) depended upon effective cavalry, the import of horses from Arabia and Central Asia was very important for rival kingdoms. This trade was initially controlled by Arab traders. Local communities of merchants known as kudirai chettis or horse merchants also participated in these exchanges. From 1498 other actors appeared on the scene. These were the Portuguese, who arrived on the west coast of the subcontinent and attempted to establish trading and military stations. Their superior military technology, especially the use of muskets, enabled them to become important players in the tangled politics of the period.