* To form joint venture with India's Tata Group
* Zara stores in Mumbai, New Delhi from 2010
* Shares down 0.3 percent versus a 1.3 percent drop in IBEX
(Adds analyst comment, shares, background on market, rivals)
By Sonya Dowsett
MADRID, Feb 5 (Reuters) - Europe's biggest clothing chain, Inditex, said on Thursday it had signed a deal with India's Tata Group conglomerate to open stores in India, as it pushes ahead with aggressive international expansion.
Inditex is taking a 51 percent stake in a joint venture with Tata's retail arm, Trent, and will open the first Zara stores in New Delhi, Mumbai and other Indian cities from 2010.
Inditex is the latest international retailer to move into the world's second most populous nation, where retail sales have surged over 40 percent in the past three years to $472 billion in 2008, according to Planet Retail.
Under Indian law, foreign multi-brand retailers are limited to wholesale or licence and franchise arrangements. Arch rivals Sweden's H&M and Gap Inc of the U.S. have no presence in India.
"The move opens up another huge potential market for Inditex for the long-term," said Phil Rudman, analyst at Exane.
Inditex, whose other stores include teen brand Bershka and upmarket label Massimo Dutti, has moved into fast-growing economies like Russia and China, with more than 4,200 stores in 73 countries.
AWAY FROM SPAIN
Its expansion into the savings-rich economies of the Middle East and Asia has cut the significance of its domestic market, Spain, which is undergoing a deep recession, to around 35 percent of sales from about half five years ago.
The Tata Group has been the flagbearer of corporate India's overseas expansion, buying Anglo-Dutch steelmaker Corus in 2007 and car brands Jaguar and Land Rover in 2008.
Tesco, Britain's biggest retailer, announced a hypermarket joint venture with Tata Group in August, following a similar move by U.S. giant Wal-Mart Stores Inc, the world's top retailer, which teamed up with India's Bharti Enterprises.
Marks & Spencer, Britain's biggest clothing retailer, has franchised stores in India and announced a drive in November 2007 to trade up to bigger formats.
Inditex shares were 0.3 percent lower at 30.61 euros at 0950 GMT, compared with a 1.3 percent drop in Spain's blue-chip index . (Additional reporting by Mark Potter in London, editing by Will Waterman)