Part 13 of Indian Constitution: Trade, Commerce and Intercourse within the territory of India (Articles 301-307)

Part 13 of Indian Constitution deals with Trade, Commerce, and Intercourse within India (Articles 301–307). It ensures the freedom of trade across the country while allowing certain restrictions in public interest.

• Article 301: Guarantees free trade, commerce, and intercourse throughout India
• Article 302: Empowers Parliament to impose restrictions for public interest
• Article 303: Restricts discriminatory trade legislation by the Union or States
• Article 304: Allows States to impose reasonable restrictions on trade
• Article 305: Protects existing laws and State monopolies
• Article 307: Provides for an authority to oversee implementation

Explore other important Constitutional Articles

Part 13 of Indian Constitution Overview

Part 13 of Indian Constitution covers Article 301 to Article 307. It focuses on the freedom of trade, commerce and intercourse within India. Article 301 guarantees this freedom across the country and provides the general principles of trade and commerce. Article 302 grants Parliament the authority to impose restrictions in the public interest whereas Article 303 limits the legislative powers of both the Union and States to prevent discrimination against trade from other states. Article 304 allows states to impose restrictions under certain conditions. Article 307 constitutes an authority to implement these provisions. Trade has always played an important role as no country or state can produce all the products it needs. Thus, regulations and laws are essential for governing, managing and facilitating trade. The provisions in Part 13 were borrowed from the Australian Constitution. 

Download 5 key take aways on Part 13 of Indian Constitution

Part 13 of Indian Constitution plays a crucial role in ensuring economic integration across the nation. It provides a legal framework for the free movement of goods and services, while also balancing the authority of the Centre and States. The key features of this Part include:

• Freedom of Trade and Commerce: Article 301 ensures the free flow of trade, commerce, and intercourse throughout the territory of India, forming the foundation for a unified national market.
• Power of Parliament and States to Regulate in Public Interest: Articles 302 and 304 allow the Parliament and State Legislatures to impose reasonable restrictions on trade and commerce in the public interest, such as protecting public health, maintaining order, or encouraging regional development.
• Protection of State Monopolies: Article 305 safeguards existing laws and allows the creation of State monopolies in specific sectors, such as liquor or essential commodities, even if they restrict trade.
• Repeal of Outdated Provisions: Article 306, which dealt with temporary financial arrangements with Indian States, was repealed, reflecting the evolution of the Indian economy and the centralization of trade regulation.

Part 13 of Indian Constitution Scheme

The following is the scheme of the components of Part 13 of Indian Constitution. It outlines the provisions related to trade, commerce and intercourse within India. The table below highlights the articles and their descriptions:

Part	Articles	Description
Part XIII -	Article 301	Freedom of trade, commerce and intercourse
	Article 302	Power of Parliament to impose restrictions on trade, commerce and intercourse
	Article 303	Restrictions on the legislative powers of the Union and of the States with regard to trade and commerce
	Article 304	Restrictions on trade, commerce and intercourse among States
	Article 305	Saving of existing laws and laws providing for State monopolies
	Article 306	Repealed
	Article 307	Appointment of authority for carrying out the purposes of articles 301 to 304

Several landmark judgements have helped interpret and define the scope of Articles 301 to 307 under Part 13 of Indian Constitution. These judgments clarify the balance between the freedom of trade and the power of the legislature to impose reasonable restrictions.

• Jindal Stainless Ltd. v. State of Haryana (2016): Explained the distinction between compensatory and discriminatory taxes, holding that only taxes serving public welfare align with Article 302.
• State of Madras v. N.K. Nataraja Mudaliar: Upheld the validity of the Central Sales Tax Act, ruling that variation in tax rates among states does not amount to discrimination under Article 303 under Part 13 of Indian Constitution.
• Atiabari Tea Co. Ltd. v. State of Assam (1961): Asserted that any law directly restricting the free flow of trade violates Article 301 unless justified under Articles 302 to 304.