The concept of Trade & Commerce in the Indian context is a constitutional provision, specifically the Freedom of Trade, Commerce, and Intercourse enshrined in Part XIII of the Constitution of India, comprising Articles 301 to 307. This freedom is a constitutional right, not a fundamental right, and applies to the movement of goods, services, and people across the territory of India.
The provision was created because the framers of the Constitution desired to establish India as a single economic unit by removing internal barriers and obstacles to trade between states. The objective was to ensure the free flow of trade and commerce as a sustaining force for the stability and economic integration of the federal polity. The origins of this provision can be traced to Section 297 of the Government of India Act, 1935, and it was inspired by Section 92 of the Australian Constitution.
The mechanism is established by Article 301, which declares that "trade, commerce and intercourse throughout the territory of India shall be free," subject to the other provisions of Part XIII. This freedom is not absolute, as Articles 302 to 305 lay down the restrictions. Article 302 empowers Parliament to impose restrictions on this freedom in the public interest. Article 304(a) allows a State Legislature to impose a tax on goods imported from other states, provided the tax is equal to the tax imposed on similar goods produced within that State, ensuring non-discrimination. Article 303 prohibits both Parliament and State Legislatures from giving preference to one state over another in matters of trade, except when Parliament declares it necessary to deal with a scarcity of goods.
This constitutional concept is closely connected to the Goods and Services Tax (GST), which was introduced by the One Hundred and First Amendment Act, 2016, replacing multiple central and state taxes to further create a unified national market. It also relates to the Foreign Trade Policy (FTP) 2023, which aims to increase exports to $2 trillion by 2030 and focuses on ease of doing business and digitalization in trade. A significant recent change was the repeal of Article 306 by the Constitution (Seventh Amendment) Act, 1956, which had granted special trade powers to certain Part B States. Furthermore, the government is actively pursuing Free Trade Agreements (FTAs) with partners like the UAE, Australia, and the European Free Trade Association (EFTA) to boost global trade.