The correct answer is option 1: Multi-brand retailing.

In June 2016, the Indian government introduced changes in the Foreign Direct Investment (FDI) policy, which affected various sectors. Let`s analyze each option to understand how they were impacted.

Option 1: Multi-brand retailing. This sector is not affected by the changes in the FDI policy. Multi-brand retailing refers to retail stores that sell products from multiple brands. The FDI policy allows 51% FDI in multi-brand retailing, subject to certain conditions. Hence, any changes made in the FDI policy in June 2016 did not affect this sector.

Option 2: Defence. The FDI policy in the defence sector was revised in 2016, allowing up to 49% FDI under automatic approval and beyond that with government approval. Therefore, this option is affected by the changes made in the FDI policy.

Option 3: Private security agencies. The FDI policy allows up to 49% FDI in private security agencies under automatic approval. Hence, this sector is affected by the changes in the FDI policy.

Option 4: Manufacturing of small arms and ammunitions covered under the Arms Act, 1959. The FDI policy