This paper investigates inductance characteristics of a novel 14 pole/18 slot, fractional-slot concentrated-winding (FSCW) IPM machine. The variations of the self and mutual inductances were calculated analytically and also obtained from the finite element model. These results were compared with experimentally measured values of the self and mutual inductances of the prototype machine. Study of the inductance characteristics reveals that both self and mutual inductances vary with rotor positions nonsinusoidally. Presence of harmonics in the magnetomotive force (MMF) is responsible for this nonsinusoidal variation of inductances. The conventional distributed winding machine does not have these harmonics. This paper analyses the contribution of these harmonics in the Ld and Lq parameters in a dq-model of the prototype FSCW machine constructed. The self and mutual inductances were represented by a Fourier series in the inductance matrix of the machine for dq-transformation. It was seen that the difference between d- and q-axis inductance is mainly contributed by the harmonic terms of the mutual inductance.