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Shares of smartphone maker Nokia are down nearly 3% in morning trading Wednesday after the company was hit by another setback in its ongoing tax battle with India's government.

The Financial Times reports a court ruling last week imposed extra conditions before Nokia would be cleared to transfer its assets in India to Microsoft as part of its $7.2 billion acquisition deal.

Nokia has appealed the ruling to India's highest court. At issue is a manufacturing factory based in India that employs 30,000 people, says the report.

"Under the new terms of the court we will not now be in a position to transfer our assets, and that would put the continuity of our operations and their 30,000 employees in serious jeopardy," said Nokia in a statement to the Financial Times.