This paper presents a detailed analysis of dynamic properties and accuracy issues of the torque-producing stator current control loop for vector-controlled induction motor drives. In this paper, a necessary mathematical description of vector control of an induction motor is shown with respect to the x-axis and y-axis current control in the rotating reference frame. A derivation of a steady-state error for the torque-producing stator current control scheme with and without a decoupling algorithm is described. The presented derivation and dynamic behavior of both these schemes were extensively tested in the MATLAB-SIMULINK software, considering different values for the moment of inertia. This solution was implemented in a DSC-based induction motor drive using a voltage source inverter to obtain experimental results. Moreover, the advantages of using the presented decoupling block for compensation of the problem are discussed at the end of the paper.