Wootz steel originated in the mid-1st millennium BC in India, in present-day Tiruchirappalli,  Kodumanal, Erode, Tamil Nadu. There are several ancient Tamil, North Indian, Greek, Chinese and Roman literary references to high-carbon Tamil steel. In later times, wootz steel was also made in Golconda in Telangana, Karnataka and Sri Lanka. The steel was exported as cakes of steely iron that came to be known as "Wootz". The method was to heat black magnetite ore in the presence of carbon in a sealed clay crucible inside a charcoal furnace to completely remove slag. An alternative was to smelt the ore first to give wrought iron, then heat and hammer it to remove slag. The carbon source was bamboo and leaves from plants such as Avārai. Locals in Sri Lanka adopted the production methods of creating wootz steel from the Chera Tamils by the 5th century BC. Joseph Needham in 1971 claimed China produced a similar steel also by the 5th century BCE but more recent research in China (2009) showed that Needham erroneously identified the ancient Chinese steel as hyper-eutectoid and similar to wootz  but it was really produced via co-fusion process instead (smelting cast iron and wrought iron together). Genuine wootz in China was mentioned for the first time much later, during the Bei Wei Dynasty (386-534 CE) under the name “Bintie” or “Pin t’ieh” as being produced in India, ingots were initially given by Persian Kings as valuable presents, later the Chinese called "bintie" the various co-fusion hard steels they produced. In Sri Lanka, this early steel-making method employed a unique wind furnace, driven by the monsoon winds. Production sites from antiquity have emerged, in places such as Anuradhapura, Tissamaharama and Samanalawewa, as well as imported artifacts of ancient iron and steel from Kodumanal. Recent archaeological excavations (2018) of the Yodhawewa site (in Mannar District) discovered a lower half-spherical furnace, crucible fragments, and lid fragments related to the crucible steel production through the carburization process.  A 200 BC Tamil trade guild in Tissamaharama, in the South East of Sri Lanka, brought with them some of the oldest iron and steel artifacts and production processes to the island from the classical period.
Trade between India and Sri Lanka through the Arabian Sea introduced wootz steel to Arabia. The term muhannad مهند or hendeyy هندي in pre-Islamic and early Islamic Arabic refers to sword blades made from Indian steel, which were highly prized, and are attested in Arabic poetry. Further trade spread the technology to the city of Damascus, where an industry developed for making weapons of this steel. This led to the development of Damascus steel. The 12th century Arab traveler Edrisi mentioned the "Hinduwani" or Indian steel as the best in the world. Arab accounts also point to the fame of Teling steel, which can be taken to refer to the region of Telangana. The Golconda region of Telangana clearly being the nodal centre for the export of wootz steel to West Asia.
Another sign of its reputation is seen in a Persian phraseto give an "Indian answer", meaning "a cut with an Indian sword". Wootz steel was widely exported and traded throughout ancient Europe and the Arab world, and became particularly famous in the Middle East.