Home The Constitution Part XIII Article 303

Art. 303 Part XIII: Trade, Commerce and Intercourse within India

Restrictions on the Legislative Powers of the Union and States With Regard to Trade and Commerce

Exact text — Constitution of India

(1) Notwithstanding anything in article 302, neither Parliament nor the Legislature of a State shall have power to make any law giving, or authorising the giving of, any preference to one State over another, or making, or authorising the making of, any discrimination between one State and another, by virtue of any entry relating to trade and commerce in any of the Lists in the Seventh Schedule.

(2) Nothing in clause (1) shall prevent Parliament from making any law giving, or authorising the giving of, any preference or making, or authorising the making of, any discrimination if it is declared by such law that it is necessary to do so for the purpose of dealing with a situation arising from scarcity of goods in any part of the territory of India.

In Plain English

What this Article actually means

This Article bars both Parliament and State Legislatures from playing favourites between states in trade matters — no law can give one state a preferential trade advantage over another. The only exception (clause 2) is a genuine scarcity situation, where Parliament can specifically declare it necessary to discriminate in order to manage the shortage, such as directing a scarce resource to the areas that need it most.

Why This Matters To You

How it shows up in everyday life

This is why, for example, one state can't lobby for a law that specifically favours its own industries over an identical industry in a neighbouring state — India's constitutional design treats all states as economic equals in trade matters, with the scarcity exception being narrowly and specifically justified, not a general escape hatch.

Read alongside this one

Art. 302 — Power of Parliament to Impose Restrictions on Trade Art. 246 — Union, State and Concurrent Lists

Frequently Asked

Quick answers about Article 303

Can a state give tax incentives to attract businesses without violating this Article?

Generally yes — this Article targets discriminatory treatment written into trade/commerce laws between states, not a state's own economic development incentives offered within its jurisdiction to attract investment, which operates on a different legal basis.

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The text above reproduces Article 303 of the Constitution of India as amended to date, for general educational reference. It is public-domain legislative text, but we recommend cross-checking the authoritative version at legislative.gov.in or india.gov.in before relying on it for a legal matter. The explanation, examples and FAQs are general information, not legal advice — consult a qualified advocate for guidance on your specific situation.