Hi there. 

All India Quota is where you get seats or I can frame it as where you are eligible to get seat in any medical College of India of any state. There's a 15% All India Quota in all medical colleges of the country. Any candidate can use this 15% quota to get a seat irrespective of their domicile state.

The rest 85% is the state quota where admissions are provided to students who belong to that one particular state itself. For example, if you are a resident of West Bengal then you will be able to get seats under State Quota in the state of West Bengal. For applying to some other state's College you'll have to apply under the 15% All India Quota. 

If a medical College in X state has 100 seats, then 15 seats are for students of different states and not X and the rest 85 seats are reserved for the students of X state. 

Hope this helps. 

Good luck!

Hey Rakshata,85% state quota implies that a medical college has 85% of its seats reserved for the students of its own state. Candidates having a Domicile certificate for a particular states are eligible to apply under this quota. While the rest 15% seats can be alloted to ALL INDIA QUOTA students, Central Pool students (for those states which have no medical college yet). Let me explain by citing an example: Suppose a medical college has a grand total of 100 seats, then 85 seats come under the category of State quota students and 15 seats are kept reserved for AIQ students.Hope this helps, good luck