The present study highlights the wave–tide interactions in a tide-dominant coast Versova, along the west coast of India. Versova is a macro tidal area and is home to fisheries. Model simulations are carried out to investigate wave–tide interactions with and without incorporating water level (WL) variations in the model setup. The simulation results are compared with the observed data at Versova. Model comparison with wave observation shows that the simulated significant wave height (Hs) reproduced the observed wave heights with an accuracy of scatter index = 8% and correlation = 0.94 with the inclusion of WL variations. The incorporation of WL variations created the energy modulations in the low-frequency part of the wave spectra, raising the periodical modulations in wave height. This low-frequency wave energy modulation is absent in the without WL simulations, resulting in underestimation of energy density which causes underestimation of Hs by ${\sim}$1 m. Hence this study strongly suggests that water level variations must be incorporated into the wave model to accurately represent wave modulations which are significant during monsoon and extreme events in the tide-dominant coastal areas.