Certainly! Here`s an explanation of the correct matching:

I. Setting up of the first cotton mill - 1854 - Bombay: This refers to the establishment of the first cotton mill in India. The cotton mill industry played a significant role in India`s industrialization during the British colonial period. The first cotton mill, known as the Bombay Spinning and Weaving Company, was established in Bombay (now Mumbai) in 1854. It marked the beginning of the textile industry in India and contributed to the growth of the manufacturing sector.

II. Manufacture of the first machine-made paper - 1870 - Near Calcutta: This refers to the production of the first machine-made paper in India. Prior to the advent of machine-made paper, paper production in India was largely manual. The first machine-made paper mill, named the Serampore Paper Mill, was established near Calcutta (now Kolkata) in 1870. This marked a significant development in the paper industry and helped meet the growing demand for paper in various sectors.

III. Setting up of the first cement factory - 1904 - Madras: This refers to the establishment of the first cement factory in India. Cement is a crucial building material, and the setting up of cement factories played a vital role in the construction industry`s growth. The first cement factory in India, named Madras Cement Works, was set up in Madras (now Chennai) in 1904. It marked the beginning of large-scale cement production in India.

Therefore, the correct matching is (I) Setting up of the first cotton mill - 1854 - Bombay, (II) Manufacture of the first machine-made paper - 1870 - Near Calcutta, and (III) Setting up of the first cement factory - 1904 - Madras, making the correct answer (I, II, and III) - I, II, and III.