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In this paper, an approach to reduce common mode voltage at the output of a matrix converter is discussed. A new indirect space vector PWM (ISV-PWM) method which reduces the common mode voltage at the output is presented. The proposed method maintains the active voltage vector and distributes zero vector equally within a sampling period and does not increase square RMS of ripple components of input/output current. Advantages of the scheme include : 34% reduction in the common mode voltage (peak value); improved harmonic spectrum; reduced number of switching instants which translate into lower switching losses and simplified implementation via software. Simulation results are shown to demonstrate the advantages of the new PWM approach. Experimental results on a 230 V, 3 kVA matrix converter fed adjustable speed drives based on DSP controller are presented.