The proposed "Pan-Asian Free Trade Area" would serve as a major global economic growth engine on a par with the European Union and the North American Free Trade Agreement area which covers the United States, Canada and Mexico, he said in a speech before South Korean businessmen.

"We feel confident that in the next few years, we may see the rise of a Pan-Asian Free Trade Area covering all major Asian economies, including India, Korea, China, Japan, ASEAN and possibly extending to Australia and New Zealand," Kalam told South Korean business leaders.

"This could be the third pole of the world economy ... and will open up new growth avenues for all our own economies."

"We believe that our economic partnership with Korea would significantly contribute to eventual emergence of such an economic community in Asia."

Kalam, who arrived in Seoul late Monday, is India's first head of state to pay a state visit to South Korea since both sides established diplomatic ties in 1973.

At a summit later with South Korean President Roh Moo-Hyun, Kalam agreed to launch negotiations for a Comprehensive Economic Partnership Agreement (CEPA) between the two countries, Roh's office said.

The first CEPA meeting will be held in March in New Delhi, it said, adding the two leaders agreed to expand ties in science, energy and IT sectors.

Both countries signed two specific bilateral agreements -- one on science and technology and the other on customs cooperation, officials said.

Bilateral trade between South Korea and India increased 24 percent year-on-year to 6.7 billion dollars in 2005, according to the South Korean foreign ministry.

Kalam called for bilateral cooperation in the IT sectors when he visited the government's "Ubiquitous Experience Center" in Seoul which features South Korea's latest mobile and broadband technologies.