The induction motor is one of the essential components of the industry. In industrial applications, the controllability, protection, and reliability of induction motors are of major concern to reserve energy. Thus, condition monitoring of an induction motor is critical for improving the unit's reliability and, as a result, reducing downtime, labor, reducing energy wastage. Induction motor stator winding and bearing failures account for 37 and 41 of failures, respectively. As the sophisticated controls rely on parameters of the motor, while the protection and reliability depend on continuous and accurate monitoring of the health of the motor. This paper covers the state of the art of parameter estimation and condition monitoring of induction motors in order to help out the industry to minimize energy wastage. In order to assist the exact operation of an induction motor, initially, the fundamentals, structure, and model of an induction motor are explained. Further, this paper covers fault diagnoses that are capable of finding the symptoms of motor failure through the state of the art of parameter estimation. In addition, the medium for the root cause of an induction motor failure is described. Finally, the paper is concluded with what has been done already, the knowledge gap, and the potential of future research. © 2022, ASM International.