The purchase groups place the purchase orders on esteemed vendors through a well laid out tendering procedure and guidelines provided under the company purchase policy. The tendering procedure and purchase policy ensure economic and transparent buying from the registered vendors in Indian or International market. It will be imperative to focus that the total cost of procurement includes material cost as well as logistics costs associated with it. The theme of successful economic buying relates to both the vendor and customer with stress on mutual benefit. The reduction in the cost of logistics is beneficial to both vendor as well as customer.In case of import procurement government / statutes provide certain concessions in duties levied for certain categories of imports. In case of BHEL, as their products occupy the core sector i.e. power, these concessions become exceedingly important for reduction of logistics costs.