New Delhi, Aug. 7 -- India's tariffs are often described as 'excessively protectionist,' but the reality is more complex.

They function less as blanket barriers and more as a response to distortions: an overvalued rupee that makes exports uncompetitive, goods and services tax (GST) exemptions that give imports an unfair edge and transfer-pricing practices that allow multinationals to shift profits abroad.

Since tariffs are shaped by wider trade and fiscal policy, they serve to disguise rather than cure the structural weaknesses that limit India's competitiveness.

They have been employed to protect domestic industry, encourage local manufacturing and cut import dependence. But continued reliance on tariffs risks trapping India in a cycl...