If nothing else, today's announcement from Nokia (NYSE:NOK) that its much-anticipated deal to sell its devices and services unit to Microsoft (NASDAQ:MSFT) has been delayed will temper some of recent speculation -- for a while, at least. The grumblings about getting the deal done on time had been growing louder as we wind up 2014's Q1, the original target date to close the transaction.

Much of the speculation, which Nokia's announcement in some ways will help to fuel, has revolved around a couple of things: the timing of gaining regulatory approval from several national and international agencies, and resolving a sticky tax issue. Turns out, Nokia and Microsoft weren't able to secure an adequate resolution to either hurdle, and that could be a bit disconcerting to some.

What's the hold up?
On Sept. 3 of last year, when Nokia and Microsoft first shared the news that the acquisition would close in Q1 of 2014, it seemed reasonable. A deal of this magnitude, particularly with Nokia's global reach, needed to get the OK from multiple regulatory bodies and that was going to take some time.

According to Nokia, the deal for its devices and services and patent licensing agreements has received regulatory approval in the U.S., as well earning a nod from the European Union. Both were major hurdles, and getting approval in those markets were big steps forward. But the folks in Asia haven't been quite as accommodating to Nokia and Microsoft, with "several antitrust authorities" in the region still reviewing the deal.

As it turns out, the regulatory delays in Asia are the least of Nokia's and Microsoft's problems as they try and close the transaction. The long-running tax issue Nokia faces in India is the real concern -- or it will be if the impasse goes on much longer.

At issue are claims from India tax authorities that Nokia, primarily because of its Chennai factory operations, needs to put about $570 million in escrow to ensure future tax payments. Nokia, for its part, has agreed to fund the escrow account, but is pushing for significantly less than India's escrow account demands.

The Chennai operations are significant enough to warrant the legal back-and-forth as Nokia and Microsoft push to close their transaction. With an estimated 8,000 employees, Chennai represents a huge piece of the devices and services unit workforce, and explains why Nokia Chairman and interim CEO Risto Siilasmaa is on a first name basis with India's commerce leader.

A few options
The easiest fix, though an expensive one, is for Nokia to meet India's escrow account requirements and appease the tax authorities there. For about $200 million, which is the difference between the two sides, this may end up being the path of least resistance.

Nokia could also choose to keep fighting the tax claims in court, though there can't be too many appeal options left after the last one was recently denied. The concern with this alternative is that legal proceedings have a tendency to drag on, and could result in another deal-closing delay.

Excluding the Chennai factory from the Microsoft-Nokia transaction has been mentioned by some industry pundits as an alternative, and it is option -- but a bad one. The Chennai factory manufactures millions of Nokia phones annually, making it a key component of the deal. Substantially changing the terms of the acquisition at the 11th hour would hurt both Microsoft and Nokia, in terms of the deal's valuation and the negative market sentiment that would almost certainly arise.

Final Foolish thoughts
Nokia said in its statement that "ongoing tax proceedings in India have no bearing on the timing of the closing or the material deal terms of the anticipated transaction." Though that message is designed to appease shareholders, it's intriguing that Nokia felt the need to mention India and taxes at all.

Based on today's early trading activity, Microsoft and Nokia shareholders don't seem overly concerned about the transaction delay, with shares of both stocks off only slightly. It appears the market's willing to take a wait-and-see attitude, and that's an appropriate stance to take -- for now. No, it's not panic time yet, but Microsoft and Nokia investors should keep one eye on India for the next month.

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Tim Brugger has no position in any stocks mentioned. The Motley Fool owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.