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In this paper, a simplified space vector pulse width modulation (SVPWM) method has been developed for three-phase three-level voltage source inverter fed to direct torque controlled (DTC) induction motor drive. The space vector diagram of three-level inverter is simplified into two-level inverter. So the selection of switching sequences is done as conventional two-level SVPWM method. Where in conventional direct torque control (CDTC), the stator flux and torque are directly controlled by the selection of optimal switching modes. The selection is made to restrict the flux and torque errors in corresponding hysteresis bands. In spite of its fast torque response, it has more flux, torque and current ripples in steady state. To overcome the ripples in steady state, a space vector based pulse width modulation (SVPWM) methodology is proposed in this paper. The proposed SVPWM method reduces the computational burden and reduces the total harmonic distortion compared with 2-level one and the conventional one also. To strengthen the voice simulation is carried out and the corresponding results are presented.