MUMBAI, India — The Delhi High Court ruled on Thursday that Nokia would be allowed to transfer a phone factory to Microsoft, clearing a major obstacle to Nokia’s $7.4 billion sale of its mobile phone business to Microsoft after the court ordered Nokia to set aside $365 million for potential tax liabilities.

The factory, in the southern city of Chennai, is one of Nokia’s largest handset manufacturing plants and was seized along with its other Indian assets in September by the Indian tax authorities because of a tax dispute with the government.

Nokia’s tax battle with India continues, however. In March, the Indian government presented the local unit of Nokia with a bill of about $340 million in back taxes over five fiscal years.

“It is a positive move forward that Nokia has been allowed to go through with its asset sale,” said Dinesh Kanabar, the deputy chief executive of KPMG India. “It was worrisome that a hypothetical demand from the Indian tax office was becoming a barrier to a global transaction.”