This paper presents a new ST-DTC control algorithm for three-level NPC inverter fed induction machine drives. It is an improvement of a previous ST-DTC technique for 3-level inverters, which has been further improved in the following aspects: (1) it employs all the 18 active voltage vectors of the inverter hexagon, including the medium ones, whereas the previous one adopted only 12 voltage vectors; (2) it performs the torque control on the basis of three torque demand levels (instead of two), respectively big, average and small; (3) it employs a new closed-loop neutral point voltage balancing algorithm, which permits the DC link capacitor divider to share the DC link voltage, whatever voltage vector is used (even the medium ones). The proposed ST-DTC control technique has been verified experimentally on a properly devised test setup. The new neutral point voltage balancing technique proved to work properly also using medium voltage vectors, both in loaded and unloaded conditions.