To accomplish benefits such as high accuracy and fast response, the model-based loss minimisation algorithms (LMAs) are introduced in the literature, as one of the main available techniques for minimising power losses in electrical motors. They are appropriate for dynamic applications, which necessitate very fast update of the control variable. This study proposes a novel real-time LMA based on super-twisting sliding mode controller (SMC) for induction motor (IM) drives, while keeping a good dynamic response. In this regard, a loss minimisation criterion for the efficiency optimisation is proposed and scrutinised. It is shown analytically that LMA will be realised if the nonlinear controller forces this criterion to zero. Moreover, a supertwisting SMC integrated with the iron loss is proposed which directly regulates both the power loss-minimising criterion and the electromagnetic torque by choosing those as control outputs. The stability of the super-twisting SMC is also verified through the Lyapunov's stability principle. The complete closed-loop control of the proposed LMA-based IM drive is successfully implemented in real-time using a digital signal processor board TMS320F28335 for a laboratory 3-phase IM drive of 2.2 kW. The performance and functionality of the proposed scheme are assessed through experimental results.This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.