The majority of the work performed for detecting eccentricity faults for permanent magnet synchronous motors (PMSM) focus on motor current signature analysis (MCSA), as it provides continuous on-line monitoring with existing current sensors. However, MCSA cannot be applied under nonstationary conditions and cannot distinguish faults with load torque oscillations, which are limitations for many PMSM drive applications. In this paper, it is shown that the d-axis inductance, Ld, decreases with increase in the severity of eccentricity due to the change in the degree of magnetic saturation, and it is proposed as a new fault indicator. The inverter can be used to perform a standstill test automatically whenever the motor is stopped, to measure L d for eccentricity testing independent of load variations or oscillations, which is not possible with MCSA. An FE and experimental study on a 10hp PMSM verifies that eccentricity can be detected independent of the load with high sensitivity and reliability.