The correct option is C It was a strategically located port settlement.
Lothal is said to have served as a major port in the Indus Valley Civilisation. Its location was strategic as it facilitated trade to the West of the subcontinent. Given that seals from Mesopotamia have been found at Harappan sites, there is a good chance that the port at Lothal (consisting of dockyards to maintain and repair ships) was utilised as a means to trade with people from the Mesopotamian Civilisation.