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Real-time digital simulation of electrical machines and drives is a cost-effective approach to evaluate the true behavior of newly designed machines and controllers before applying them in a real system. Although many studies exist regarding the optimized models of power electronic drives and digital controllers for real-time simulation, the real-time models of electrical machines are still limited to the lumped parameter electric circuit models. This is mainly due to the complexity of a detailed electrical machine model which makes it computationally expensive. This paper presents the modeling, real-time implementation, finite element analysis, and experimental validation of a nonlinear geometrical permeance network based induction machine model. A nonlinear permeance network model (PNM) is developed for the real-time simulation of a 3 hp squirrel cage induction machine (SCIM) with closed rotor slots. Several studies both under open-loop and closed-loop control conditions are conducted and the results obtained from the off-line and realtime simulations and the experiment are compared with each other to show the effectiveness of the proposed PNM model.