Article 303

Prohibition of Inter-State Commercial Preference and Discrimination

Official heading: “Restrictions on the legislative powers of the Union and of the States with regard to trade and commerce”

Check this article against the official editionAwaiting human legal review

Source edition: The Constitution of India (as on 1 May 2026)
Source locator: Part XIII, Article 303, printed page 171
Last human source-link check: Not yet checked
Last human legal review: Not yet reviewed

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1. In One Sentence

Prohibits both Parliament and State Legislatures from making laws that give preference to one State over another or discriminate against a State, except during goods scarcity.

2. What It Means in Everyday Language

Article 303(1) establishes strict neutrality: neither the Union nor any State can pass commercial laws that favor one State or discriminate against another.

This non-discrimination rule applies across all entries relating to trade and commerce in the Seventh Schedule.

Clause (2) creates a single exception: Parliament may make discriminatory or preferential provisions if declared necessary to deal with a scarcity of goods in any part of India.

3. Practical Illustrative Example

Everyday Scenario:

A national law grants an export subsidy exclusively to textile manufacturers in State A while denying it to identical producers in State B.

Core takeaway: Article 303(1) bars such regional favoritism and invalidates laws that unfairly tilt interstate competition.

Illustrative Notice: If State B faces a severe famine, Parliament can prioritize food shipments to State B under Article 303(2).

4. Important Limits, Qualifications & Exceptions

Article 303 enforces interstate economic equality across the Indian federation.

Binds Union and States: Both Parliament and State Assemblies are barred from preferential or discriminatory trade legislation.
Seventh Schedule coverage: Applies to legislative entries governing trade and commerce in the Union, State, and Concurrent Lists.
Scarcity exception: Only Parliament (not States) may invoke the emergency scarcity exception under clause (2).

5. Operative Constitutional Text

(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.

Transcription for reference; compare with the linked official editionNot yet verified by a human legal reviewer

6. Sources & Historical Assembly Deliberations

Assembly quotations are withheld until wording, dates, and attribution have been checked against the primary record.

Sources & Citation Metadata

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Constitutional TextThe Constitution of India (as on 1 May 2026)Cited PDF page
Government of India (Legislative Department, Ministry of Law and Justice) • Part XIII, Article 303, printed page 171 • Human source-link check pending
Primary PDF accessed and transcribed with AI assistance on 14 October 2026. Formatting and amendment annotation markers are omitted; operative wording is retained. This is not human legal review. Later amendments and commencement notifications have not been comprehensively checked.

Human legal review is pending; compare the text with the cited editionNon-partisan educational resource