The princely state of Morbi was famous for its:

Ceramic industry
Port
Hill station
Forests

The correct answer is: Ceramic industry.

Morbi is a city in Gujarat, India. It is known for its ceramic industry, which is one of the largest in the world. The city has a long history of pottery making, dating back to the Indus Valley Civilization. In the 19th century, Morbi became a major center for the production of glazed tiles. Today, the city is home to hundreds of ceramic factories, which produce a wide range of products, including tiles, sanitaryware, and tableware.

The other options are incorrect. Morbi is not a port, hill station, or forest.