Option B: To protect local industries.
Countries impose tariffs on imported goods to protect domestic producers from foreign competition by making imports more expensive.
Source: Liberalisation of foreign trade and foreign investment policy, Chapter 4
The passage clearly states that trade barriers like import taxes are used to protect domestic producers from foreign competition. The Indian toy example shows how a tax raises the price of Chinese toys, reducing imports and helping Indian manufacturers. Examiners expect students to link tariffs directly to protection of local/domestic industries — not free trade, investment, or lowering costs.