The paper discusses the design of synchronous reference frame current controllers for a sensorless induction motor (IM) drive that operates in speed regulation mode or torque control mode. In most IM implementations, PI controllers alone are used for current regulation because of convenience. The reference values fed in the current controllers are either preselected or are synthesized by flux, speed or position regulators. Ideally, there should be no dependence between these two layers of controllers and their design should be done in successive steps. The current controllers are expected to force the currents to the reference values with good dynamics and no steady state error, irrespective of how the reference currents were generated. The paper shows that for a IM drive operating in speed control mode (where speed is commanded to a constant value), PI controllers alone are sufficient for proper current regulation. However, in torque control mode (where id is usually kept constant and iq is changed), the PIs alone can not regulate the currents. The analytical expressions of the current steady-state errors are derived. The proper controller design is to use compensation voltages in addition to the PIs - this eliminates the errors. The design of the decoupling compensators is reviewed. Additionally, the paper studies the current steady-state error when compensation is attempted with improper motor parameters.