Step 1: Identify the phases involved at the point where arrow I is located on the phase diagram. Arrow I is pointing to the boundary line between the Liquid and Gas regions.
Step 2: Understand that the boundary line between Liquid and Gas phases represents the equilibrium between these two phases, where both phases coexist.
Step 3: Recall the phase changes that occur between Liquid and Gas: vaporization (liquid to gas) and condensation (gas to liquid).
Step 4: Since the arrow points from Gas to Liquid, the process indicated is condensation, which is the transition from gas phase to liquid phase.
Step 5: Conclude that arrow I corresponds to condensation, the phase change where gas turns into liquid at equilibrium conditions.