In this paper, performance analysis of an induction motor drive employing a loss minimization algorithm (LMA) is presented. As the induction motors are not designed to impart high efficiency under partial loading conditions, proposed LMA is used to improve the efficiency under such load conditions. For the efficiency improvement LMA uses the rotor flux as a control variable. Mathematical model of induction motor in field oriented frame, including proposed loss model is derived. The complete drive system is simulated in MATLAB/Simulink software for different operating conditions. Simulation results obtained shows the effectiveness of the proposed algorithm in partial loading conditions. Keywords-field oriented control, induction motor, loss minimization algorithm d e e -q ·e Idr ·e l'Ir , ·e lds ·e lqs , L m L r L, p R r R, e vdr e V'Ir , e Vds e V'Is , e I.j/ dr e I.j/ q r , e I.j/ ds e I.j/ qs , OJe OJr P;n, Plh NOMENCLATURE Synchronously rotating reference frame direct and quadrature axes d e -axis and q e -axis rotor current d e e -axis and q -axis stator current Magnetizing inductance Per phase rotor inductance Per phase stator inductance N umber of poles Per phase rotor resistance Per phase stator resistance d e -axis and q e -axis rotor voltage d e -axis and q e -axis stator voltage d e -axis and q e -axis rotor flux linkage d e -axis and q e -axis stator flux linkage Stator or line frequency (rad / s) Rotor electrical speed Input power and shaft power of the motor