BKT, Pirelli Plan 50:50 Joint Venture For Passenger Car Tyres In India

Balkrishna Industries (BKT) and Pirelli Tyre have signed agreements to establish a 50:50 joint venture (JV) for manufacturing passenger car radial (PCR) tyres in India. Under the proposed arrangement, the two companies will manufacture tyres under their respective brands, with a new manufacturing plant planned in India.

The companies signed a framework agreement, an offtake agreement and a service agreement on October 22, 2026. The definitive JV agreement is yet to be executed, and the joint venture is expected to be incorporated by December 31, 2030, subject to the fulfilment or waiver of specified conditions.

The proposed JV will have a four-member board, with each company nominating two directors and the chairperson rotating between the partners. Manufacturing capacity will be shared equally.

BKT, Pirelli Sign Offtake Agreement Ahead Of JV

In the interim, the offtake agreement will allow BKT to manufacture Pirelli-branded passenger car radial tyres at its existing PCR plant in Bhuj, Gujarat. Production will follow Pirelli's specifications, with supplies made to Pirelli and its affiliates in India and overseas.

The agreement provides for pricing based on actual raw material costs plus conversion costs. Payments will be made in Indian rupees for domestic supplies and euros for exports. Pirelli will have a minimum annual offtake commitment, matched by a corresponding capacity commitment from BKT.

Pirelli will also grant BKT limited, non-exclusive rights to use specified Pirelli know-how and trademarks for manufacturing these tyres. BKT will not be permitted to manufacture comparable or competing PCR tyres for third parties, but can continue developing, manufacturing and selling its own BKT-branded passenger car radial tyres.

The offtake agreement is scheduled to terminate once the JV becomes operational and can meet Pirelli's tyre requirements. Otherwise, it will remain in force until December 31, 2031, with an option for mutual extension.

Pirelli To Provide Tyre Testing And Technical Support

Under a separate service agreement, Pirelli will provide technical support and testing services for BKT-branded tyres covering passenger cars, SUVs and two-wheelers. The services will use Pirelli's testing facilities outside India, including proving grounds, simulation systems and equipment.

BKT will pay for these services in euros according to an agreed pricing schedule, with fees set on an arm's-length basis. Services will be provided against requests and purchase orders issued by BKT.

The framework agreement also includes an exclusivity restriction preventing either company from entering into a joint venture or similar arrangement with a third party in India to manufacture car, light truck, motorcycle or bicycle tyres while the agreement remains in force. Plants wholly owned by either company are excluded from this restriction.

The proposed partnership would expand BKT's presence in the passenger car tyre segment, while giving Pirelli a manufacturing arrangement in India beyond its existing commercial presence in the country.