Set up by a Presidential order, not by a statute: what Article 263 allows an inter-State Council to do
Background
Article 263 lets the President set up a Council to improve co-ordination between the States and between the Union and the States. The Article works when the President is of the view that the public interests would be served by establishing such a body. Three duties are named for it: inquiring into and advising on disputes which may have arisen between States; investigating and discussing any subject in which some or all of the States, or the Union together with one or more States, have a common interest; and making recommendations on any such subject, in particular for better co-ordination of policy and action on it. The Council comes into being by an order of the President, and that same order defines the nature of the duties it is to perform, its organisation and its procedure. Because it rests on an order rather than on an Act, its shape can be altered without Parliament. The Article is grouped in the Constitution under the heading co-ordination between States.
In plain words
Inter-State Council A Council established under Article 263 for co-ordination between States — It advises rather than adjudicates, and owes its existence to a Presidential order.
Co-operative federalism Union and States working together on shared subjects — Article 263 is one of the Constitution's mechanisms for it.