It is limited by the terms and provisions of the Constitution. Further India is a Federal State. The Parliament of India is competent to make law only on subjects enumerated in the Union and concurrent Lists.
Only under exceptional conditions, it can make law over the State List for a stipulated period. Again, laws passed by the Parliament are subject to judicial review.
The Supreme Court of India can declare any law passed by the Parliament as ultra vires or unconstitutional, if it conflicts with the provisions of the Constitution.
All laws passed by the Parliament require the approval of the President. The President can return all bills other than the money bills to the Parliament for reconsideration. There is no time limit for the President of India to give assent to the bills passed by the Parliament. If the President so likes he can keep pending his assent over a bill for an indefinite period.
The emergency power of the President is another limitation on our parliamentary sovereignty. During the emergency the Parliament can be ignored for one-month and if the Rajya Sabha approves an emergency, the Lok Sabha can be ignored for a longer period.
Finally, the non-sovereign character of the Indian Parliament is evident from the fact that it cannot amend certain provisions of the Constitution without the concurrence of the legislatures of at least half of the States. In a federal polity like ours the supreme sovereign power cannot be given to the Central Parliament.
Thus the Parliament of India is not a fully sovereign body. Like the British Parliament, it cannot make or unmake any law as it likes as one writer has put it that the British parliament can do anything under the sun except making a man, a woman or vice-versa. This unlimited sovereign power is not vested in the Parliament of India. It cannot change “the basic features” of the institution.