Exuding confidence that export target of $50 billion could be met this year, the governmet said on Thursday that the Iraq war will not "adversely" affect India even as it added that a final assessment was yet to be made.

"My preliminary reaction will be that it (Iraq war) will not in any way adversely affect our exports," Commerce Minister Arun Jaitley told PTI after the Bharatiya Janata Party's meeting with the industry chambers on the Exim Policy.

Jaitley said, "We would have to see what was the duration of the war in order to make a final assessment."

He said the $50-billion would be entirely from the merchandise exports and would not include services and IT sectors.

Jaitley said India's target to capture one percent of world trade would be realised by 2007.   

The Exim Policy, to be announced later this month, would have to identify certain engines of growth and this was not merely for achieving the one per cent share but also for "another larger purpose."

Reasoning his optimism, he said last year had been better as the exports grew by 20 per cent in the first nine months adding, "this figure (of 20 per cent) is also deceptive" since the previous year had been bad.

Minister of State for Commerce Rajiv Pratap Rudy said the BJP cell had organised the meeting with the chambers mainly to discuss the strategies to boost exports.

Explaining Jailtey's "engine of growth", Rudy said the focus would be on manufacturing, agriculture, service and the synchronisation of the Exim Policy.

On the Iraq war and its consequences on the economy, Rudy, however, said, "oil prices will fluctuate and they will rise" and "there will be certainly an impact" on the exports since there were issues of transportation and aviation costs.

"Since production (domestic) is completely linked with the fuel prices as it increases transaction costs, it is already having an impact," he said.

"We are aware that war does affect not only the economy within the country but also exports and we are trying to see how best the Government of India will offset the repercussions created by the war," Rudy added.