The Vizag Steel Plant management and the agency are looking into detailed reasons for the incident, Rashtriya Ispat Nigam Ltd (RINL) said.
RINL said in a statement that engineers Anush Bhaskar and Rajneesh Singh, working with SMS Seimag India Ltd, "were found collapsed while carrying out an inspection job in a container laboratory handled by the agency in the expansion area."
They went inside the lab at about 10.20 AM as a part of the routine inspection of the progress of work, according to the statement.
This is the second time in less than a week that a state-owned steel company has reported loss of lives. Five Steel Authority of India employees and one contract worker died at the Bhilai plant due to a gas leak on June 12.
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SMS Seimag India is the contracting agency executing the steel melting shop-II project work as part of RINL's current expansion.
"The unit where the incident occurred is under the control of SMS Seimag India and is yet to be handed over to the company," RINL said in the statement.
The company said all gas lines of the network of the unit were in good working condition and were in closed state only while the incident took place.
"Absolutely no openings were found in the main gas distribution lines. Gas lines and all connected valves were in closed condition and were fully intact during the occurrence of incident as informed by company officials," it said.