The government has set up a standing group on the economic fallout of the ongoing US-led war on Iraq to look into issues particularly related to exports, inward remittances, oil prices and tourism.

The decision to this effect was taken at a meeting held in New Delhi by the Planning Commission, which said the Group would provide inputs and recommendations to the Core Group of Secretaries on the issue.

The GoS was set up earlier and has been functioning to look into the economic fallout of the war.

The seven-member standing group would go into the details of the impact on these sectors and give recommendations to avert any adverse impact on the economy, sources added.

Under the chairmanship of Planning Commission's secretary, the group also includes members from the agriculture, tourism, energy and industry ministries.

The government had warned that a prolonged war in Iraq could adversely affect the global economy and Indian exports in the next fiscal.

"A long war can have an adverse impact on the global economy and our exports," Union Commerce Minister Arun Jaitley had said on Monday, adding Gulf nations contribute 11 per cent of India's total exports and the "war-zone" was an important trading partner.

On the impact of the war on exports of this fiscal, he said, "I don't think the war would have any significant impact on this fiscal's exports as it started in the last 10 days." However, he said India's export prospects would depend on the duration of the war and the impact on global oil prices and economy.

Jaitley also admitted that the situation in Iraq was "serious" and there was a fair amount of uncertainty over the Indian export consignments.

"Orders worth Rs 1,000 crore (Rs 10 billion) of Indian exports to Iraq were at various stages of execution. Exports worth Rs 600 crore (Rs 6 billion) were at the delivery stages and Rs 400 crore (Rs 4 billion) orders were in the pipeline," he said.

The minister said the ECGC cover to Indian exports to Iraq stands "suspended" for the time being due to the war.   

He said most of the exports to Iraq were under the United Nation's oil-for-food programme and the government has taken up this issue with the apex multi-lateral organisation.

"We are taking up the matter with the UN on whether the shipments, which are waiting to be delivered to Iraq can be diverted to other ports like that in Syria," he added.

Asked whether the government was taking any emergency measures to counter the war impact, Jaitley said, "We are concerned about the situation. The insurance and freight costs have gone up globally. The trade with the rest of the world is normal," he added.

There were also fears of tourism industry taking a severe blow following the ongoing war. Already, the tourism and hotel industry was reeling under pressure because of September 11 terrorist attacks in the US and global economic slowdown.