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A review of the literature suggests that modeling of induction machines with saturation has received considerable attention. Most of these models are very application specific. None of them, however, seems to be completely adequate for the purpose of fault diagnosis. This is because for a noninvasive detection technique such as Motor Current Signature Analysis (MCSA), one has to detect different frequency components in the line current of the machine. Incorporation of saturation in the induction machine model will help in identifying and analyzing harmonics in the line current spectra that may arise due to the interaction of saturation with a specific fault. The present paper attempts to create such a model. The model uses modulation of air-gap permeance in order to emulate saturation. Modified winding function approach (MWFA) has been used to model the induction machine with saturation. To demonstrate the effectiveness of the model, certain high-frequency harmonics that can be predicted theoretically are shown to be present in the line current of the simulated machine. Experimental results also confirm the presence of these harmonics. The author plans to extend this model in the future for fault analysis.