The present invention relates to an eco-friendly and single step process for the preparation of high purity iron by using hydrogen plasma in a suitable smelting reactor furnace. Reduction of iron oxide in excess of 99% can be achieved by reducing the iron ore in hydrogen plasma smelting system. The product quality is greatly improved as there is no instance of coke inclusion which otherwise would have carried carbon, sulphur, phosphorous, silica, etc. with it. In addition, this greatly diminishes carbon dioxide emission thereby making the process highly eco-friendly in nature. Apart from these, the process produces water as the only by-product. The process takes care of the green house effect with the non-involvement of gases like carbon dioxide, carbon monoxide during the operation. Thus, the present process is developed to produce high pure iron in a hydrogen plasma reactor without using carbon as reductant which thereby reduces the carbon dioxide emission drastically.