The correct option is D - 2 and 3 only.

[as per provisional answerkey]

Why this is correct

This is a LOGICAL / VERBAL REASONING question based on identifying valid assumptions from the passage.

Assumption 2 is valid: The passage explicitly suggests that to improve accessibility for smallholder farmers in India, it would be helpful to "develop Indian languages-based AI tools" and "partner with AgTechs to create affordable AI solutions." This implies the underlying assumption that language barriers and high costs are currently hindering reach, and addressing them will help AI solutions reach more small farmers.
Assumption 3 is valid: The passage states, "India is starting to deploy AI for critical use cases such as weather forecasting, pest detection and control, and crop yield optimisation. However, penetration is limited..." This directly supports the assumption that while penetration is low, critical application areas are already active in India.

Why the other options are incorrect

Assumption 1 - Agricultural productivity has marched ahead in the West because of the economies of scale facilitated by the adoption of AI tools: This is an invalid assumption. While the passage mentions that the US and Europe use generative AI for precision farming at scale, it does not state that their overall agricultural productivity has "marched ahead" because of AI. The passage describes the current state of AI usage, not the historical cause of productivity differences.
Option (a) - 1, 2 and 3: Incorrect because it includes Assumption 1, which goes beyond the scope of the facts provided in the passage.
Option (b) - 2 only: Incorrect because it ignores Assumption 3, which is clearly supported by the opening sentence of the passage.
Option (c) - 1 and 3 only: Incorrect because it includes the flawed Assumption 1 and excludes the logically sound Assumption 2.

Key Concept

Assumption testing requires identifying unstated premises that must be true for the passage's conclusions to hold, while avoiding external information or causal links not established by the text.