After 1865, Indian cotton exports to Britain declined because of __________.

The revival in the production of cotton in America after the Civil War.

The correct answer is Option (1) → The revival in the production of cotton in America after the Civil War.

While the boom lasted, cotton merchants in India had visions of capturing the world market in raw cotton, permanently displacing America. The editor of the Bombay Gazette had asked in 1861, “What can prevent India from supplanting the Slave States (of U.S.A.) as the feeder of Lancashire?” By 1865 these dreams were over. As the Civil War ended, cotton production in America revived and Indian cotton exports to Britain steadily declined.