Direct reduced iron (DRI) is obtained from iron ore by reduction using microwave assisted low temperature hydrogen plasma. The process includes steps of: (a) loading iron ore onto a sample holder (b) placing the sample holder inside a chamber followed by evacuating the chamber; (c) introducing hydrogen gas in the chamber at flow rate ranging between 100-500 standard cubic centimeters (sccm) followed by heating the sample holder and the iron ore at a temperature ranging between 300-800° C., a pressure ranging between 20-100 torr and a microwave power ranging between 500-1500 W to obtain direct reduced iron; and (d) cooling the direct reduced iron obtained in step (c) by flowing hydrogen at flow rate of about 300 sccm.