After learning they were laid off, about a dozen workers attacked a vehicle carrying Radhey Shyam Roy as he was leaving the factory in eastern Orissa state on Thursday, dousing the Jeep with gasoline and setting it on fire, said police Superintendent Ajay Kumar Sarangi.
Two other people in the vehicle were allowed to flee but Roy, 59, was trapped inside and later died of severe burns, Sarangi said.
Police were questioning two workers and their formal arrest on murder charges was likely, Sarangi told The Associated Press. The steel factory is in Bolangir district, nearly 250 miles (400 kilometers) west of Bhubaneshwar, the capital of Orissa state.
Incidents of industrial violence are common in India, where workers often target executives in cases of wage disputes and job losses.
In 2008, scores of dismissed employees of an Italian manufacturing company, Graziano Transmissioni India, used iron rods and wooden sticks to beat to death the company's local chief executive officer on the outskirts of New Delhi.