Indirect vector controlled induction motor drives are gaining acceptance because they allow the induction motor to be controlled like a separately excited dc motor, i.e. they achieve decoupling of torque and flux producing currents. But, the effectiveness of these drives is lost as they are highly parameter sensitive. Studies have indicated that the decoupling of the torque and the flux channels is lost when machine parameters change with temperature, saturation, etc. Many schemes have been proposed to overcome these parameter sensitivity effects. But most of these schemes themselves are parameter-dependent and hence inapplicable to high precision control applications. A new parameter compensation scheme which uses air gap power equivalence for sensing parameter changes is developed in this thesis. It is shown that this scheme is independent of key motor parameters and requires no additional transducers for implementation. / M.S.