This paper presents a simple and accurate method for the on-line measurement of the unsaturated phase inductance of a switched reluctance motor (SRM). The basic principle behind the approach is to obtain the instantaneous flux linkage of the phase, which when divided by the instantaneous current of the corresponding phase will dynamically generate the phase inductance for that rotor position. A numerical division process, based on Newton-Raphson (N-R) iterative method, has been implemented using the sensed current and estimated flux linkage on an FPGA platform to generate the inductance value at each instant. It is ensured in the practical implementation that the iron parts do not saturate. It has been also verified through simulation using standard finite-element method (FEM) software packages. Further, it has been established that the effect of mutual inductance is negligibly small. The proposed method will give the true value of the unsaturated inductance of the phase identified for diagnosis/measurement. Practical results, for the experiments conducted on an existing 4 kW, 1500 rpm Oulton-make SRM, have been also presented. They are further validated against the results obtained from FEM analysis and against previously published results of the phase inductance values for this SRM. The results are found to be in very good agreement.