Balkrishna Industries Limited (BKT) and Pirelli Tyre signed a framework agreement, an offtake agreement, and a service agreement on October 22, 2026, to establish a 50:50 joint venture for manufacturing passenger car radial (PCR) tyres in India.
Under the proposed arrangement, a new manufacturing plant will be constructed in India, producing tyres for both brands with manufacturing capacity shared equally between the two partners. The joint venture will be governed by a four-member board of directors, with each company nominating two representatives and the chairperson position rotating between the partners. Execution of the definitive joint venture agreement and entity incorporation is targeted for completion by December 31, 2030.
Prior to the joint venture becoming fully operational, an interim offtake agreement enables BKT to manufacture Pirelli-branded passenger car radial tyres at its existing production facility in Bhuj, Gujarat. Production will adhere strictly to Pirelli technical specifications for distribution across domestic and export markets.
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Commercial terms stipulate pricing based on actual raw material costs plus conversion costs, settled in Indian Rupees for domestic supplies and Euros for exports. Under the deal, Pirelli will grant BKT limited, non-exclusive rights to specified know-how and trademarks. The interim offtake agreement will remain in force until December 31, 2031, unless terminated earlier once the joint venture becomes operational.
Under a separate service agreement, Pirelli will provide advanced technical assistance and testing services for BKT-branded passenger car, SUV, and two-wheeler tyres using its international proving grounds, simulation systems, and specialised equipment. BKT will pay for these services in Euros on an arm's-length basis.
Furthermore, the framework agreement establishes strict mutual exclusivity, preventing either manufacturer from forming joint ventures with third parties in India for car, light truck, motorcycle, or bicycle tyres.
