Northern and Southern Indian alphabets are plural. So they were derived and not was derived, making A incorrect.
Similarly D is using singular verb "Derives" so incorrect.
In E bringing and deriving are made parallel when they should not be.
B creates a sentence fragment by using participle or noun form of verb.
So I will go with C. (Although bringing the Aramaic script with it is more preferable)
You are right!
5. The Achaemenid empire of Persia reached the Indus Valley in the fifth century B.C., bringing the Aramaic script with it, from which was derived both northern and
southern India alphabets.
A. the Aramaic script with it, from which was
derived both northern and
B. the Aramaic script with it, and from which deriving
both the northern and the
C. with it the Aramaic script, from which derive both the northern and the
D. with it the Aramaic script, from which derives both northern and
E. with it the Aramaic script, and deriving from it
both the northern and
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