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In this paper, a fixed-switching-frequency closed-loop modulation of a voltage-source inverter (VSI), upon the digital implementation of the modulation process, is analyzed and characterized. The sampling frequency of the digital processor is considered as an integer multiple of the modulation switching frequency. An expression for the determination of the modulation design parameter is developed for smooth modulation at a fixed switching frequency. The variation of the sampling frequency, switching frequency, and modulation index has been analyzed for the determination of the switching condition under closed loop. It is shown that the switching condition determined based on the continuous-time analysis of the closed-loop modulation will ensure smooth modulation upon the digital implementation of the modulation process. However, the stability properties need to be tested prior to digital implementation as they get deteriorated at smaller sampling frequencies. The closed-loop modulation index needs to be considered maximum while determining the design parameters for smooth modulation. In particular, a detailed analysis has been carried out by varying the control gain in the sliding-mode control of a two-level VSI. The proposed analysis of the closed-loop modulation of the VSI has been verified for the operation of a distribution static compensator. The theoretical results are validated experimentally on both single- and three-phase systems.