India is today one of the most attractive automotive markets in the world, with car registrations estimated to increase by 5-7 per cent annually from 2025 to 2030 and a premium car tyre market seen growing almost fivefold, the companies said in a statement.
The partnership unites Pirelli’s high-end technological leadership with BKT’s local industrial positioning and strong presence, it added.
In the first phase based on an offtake agreement, BKT will produce, in one of its own newly constructed plants equipped with the most advanced technology, up to 800,000 Pirelli branded tyres by 2030 with Pirelli’s specific technological and quality standards.
The agreement paves the way for a second phase which envisages, subject to certain conditions, the creation of a 50-50 joint venture and the construction of a production plant dedicated to High Value car tyres, both with the Pirelli brand and the BKT brand to serve India and other international markets.
The two companies plan to execute the joint venture agreement in the future, with incorporation targeted by 31 December 2030.
For Pirelli, with only a commercial presence in India at present, the agreement constitutes a significant step towards reinforcing its positioning in a Country characterized by great potential and growing demand for High Value tyres, the segment where Pirelli is focused.
For BKT, the agreement supports the company’s expansion into the passenger car tyre segment and is expected to create new opportunities in both domestic and international markets.
“India is taking an ever more central role in the evolution of the global automotive industry, thanks to the market’s growth, development of mobility and progressive strengthening of the Country’s industrial and technological competencies,” Marco Tronchetti Provera, Executive Chairman Pirelli said.
The agreement with BKT, a first-class industrial partner with solid roots in India and a significant international presence, represents for Pirelli a strategic choice which will allow us to strengthen our position in a market among those with the greatest growth potential and to accompany its evolution, drawing on our competencies, innovation and positioning in the segments with the greatest value, he said.
“This partnership brings together complementary strengths to capture the opportunities of a growing market while creating value for both companies,” Arvind Poddar, Chairman and Managing Director, Balkrishna Industries Ltd, said.
“We are confident that the collaboration between BKT, with its industrial excellence and knowledge of the market, and Pirelli, bringing innovative technologies and highend positioning, will not only open new opportunities for both groups but will also contribute to the growing premiumization of the Indian tyre market. The outlook for the national automotive market, and especially for the partnership’s premium products is very promising. And the time is right to catch that wave,” Andrea Casaluci, CEO Pirelli said.
“When a globally established brand such as Pirelli chooses BKT, it is a recognition of the manufacturing strength, quality and expertise we have built over decades. We are proud to bring our industrial scale to this partnership and to serve customers not only in India but also across our international markets. Pirelli’s technological leadership and BKT’s industrial capabilities provide together a strong foundation for lasting values,” Rajiv Poddar, Joint Managing Director of Balkrishna Industries, said.
The proposed joint venture 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 between both partners.
While the Framework Agreement is in, either party may enter into a joint venture or similar arrangement in India with a third party for manufacturing car, light truck, motorcycle or bicycle tyres. Plants wholly owned by either party are excluded.
The agreement comprises offtake and service agreements. For offtake agreement the consideration will be based on raw material (at actuals) plus conversion costs, payable in rupees (domestic supplies) or EUR (exports), supported by a minimum annual offtake commitment from Pirelli and a corresponding capacity commitment from the company
Under the service agreement: Fees payable by the Company in EUR, at arm’s length, as per an agreed price schedule.