Argument is X restrictive govt (meaning not letting distribute resource even though available) is responsible for decline in export but not was the case in Y for same reason
Undermining argument should be one that opposes this argument and provides another reason for decline, hence D is correct as it provides altogether another logic

A is irrelevant as we are talking manufacturing
B is counter as it should've led to increase
C is again counter as final situation is different
E Govt is restrictive not fair