Relations Between Union and States
(1) Parliament has exclusive power over Union List (List I) matters. (2) Parliament and State Legislatures both have power over Concurrent List (List III) matters. (3) State Legislatures have exclusive power over State List (List II) matters for their own state. (4) Parliament can legislate on any matter for territory not part of any state, even if it's a State List subject.
This is the foundational division of law-making power in India's federal system: the Seventh Schedule's three lists divide subjects between exclusively-Union matters (like defence and foreign affairs), exclusively-State matters (like police and public health), and Concurrent matters both can legislate on (like education and forests) - with Parliament's exclusive Union List power and shared Concurrent List power both taking precedence in case of any conflict framing.
This is why only Parliament can legislate on national defence or currency (Union List subjects), only a state legislature can normally legislate on local police administration (a State List subject), and both Parliament and a state legislature can pass laws on education (a Concurrent List subject) - with Parliament's law prevailing if they conflict, per Article 254.