Pirelli, BKT in India car tyre production deal

Italian tyre maker Pirelli has entered a strategic agreement with India’s Balkrishna Industries (BKT) to manufacture up to 800,000 Pirelli‑branded premium passenger car tyres in India by 2030. The deal marks Pirelli’s move to add local production to its existing commercial presence in India, focused on the country’s high‑value tyre segment.

The agreement comes as India is emerging as one of the world’s most attractive automotive markets, with car registrations estimated to grow between 2025 and 2030 and the premium car tyre segment projected to expand significantly. The partnership is designed to capture this growth while supporting Pirelli’s sales in India and overseas markets.

The collaboration is structured in phases, beginning with an offtake agreement that allows BKT to manufacture Pirelli‑branded passenger car tyres at its existing passenger car radial plant in Bhuj, Gujarat. Production will follow Pirelli’s specifications, and supplies will be made to Pirelli and its affiliates in India and abroad.

Pricing under the offtake arrangement will be based on actual raw material and conversion costs. Payments for domestic supplies will be settled in Indian rupees, while export payments will be made in euros. Pirelli has committed to a minimum annual offtake, and BKT will provide matching production capacity.

The offtake agreement will terminate once a planned joint venture becomes operational and can fully meet Pirelli’s requirements. If that condition is not met, the arrangement will remain in place until December 31, 2031, with an option for mutual extension.

Beyond the initial offtake phase, BKT and Pirelli have signed agreements to establish a 50:50 joint venture to manufacture passenger car radial tyres in India, subject to specified conditions. The incorporation of this joint venture is targeted by December 2030, and a new plant is planned in India with manufacturing capacity shared equally between the partners.

The proposed joint venture will have a four‑member board, with each company nominating two directors. The chairperson role will rotate between Pirelli and BKT, reflecting equal governance. The framework agreement restricts both companies from entering similar tyre‑manufacturing joint ventures with third parties in India for as long as it remains in force, excluding wholly owned plants.

Under the offtake agreement, Pirelli will grant BKT limited, non‑exclusive rights to use specified know‑how and trademarks for manufacturing Pirelli‑branded tyres. While BKT cannot produce comparable or competing passenger car radial tyres for third parties, it remains free to develop and sell its own branded passenger car tyres.

A separate service agreement provides that Pirelli will offer technical support and testing services for BKT‑branded tyres for passenger cars, SUVs and two‑wheelers using its facilities outside India. BKT will pay for these services in euros under an agreed pricing schedule, reinforcing technical collaboration beyond the Pirelli‑branded product line.

Pirelli currently has commercial operations but no local manufacturing in India, and the partnership is intended to strengthen its position in the country’s high‑value tyre segment. By combining Pirelli’s premium brand and technology with BKT’s manufacturing base, the partners aim to address rising demand in India’s expanding automotive market and support international supply.

BKT’s chairman and managing director Arvind Poddar described the partnership as bringing together complementary strengths to capture opportunities in a growing market while creating value for both companies. The two‑phase structure, with a path toward a joint venture plant, provides a framework for scaling Pirelli‑branded car tyre production in India over the remainder of the decade.