The use of fiber bragg gratings (FBG) as optical sensors continues to see a wide range of science and engineering applications. These applications have utilised different measuring parameters to monitor and detect abnormalities within the systems where FBGs are installed. This paper utilises FBG bonded to a giant magnetostrictive material, Terfenol-D (FBG-T), and electrical machine stray flux (EMSF), to realise non-invasive condition monitoring of an induction motor. With a DC motor and two identically rated three phase induction motors, FBG-T was used for rotor cage damage detection in this work. In addition to observed bragg shifts, spectral behaviour of the resulting grating profile as well as distinct feature extraction from observed plots were used to clearly detect the fault in the induction motor. The faulty machine experienced about 5 pm more shift than the healthy machine for a maximum magnetic flux density of about 0.18mT; and followed a distinct and aberrant path. With both healthy and faulty machines continuously monitored for 20 h at different frequencies, both machines were observed to respectively have maximum Braggshifts of about 68 pm and 78 pm at 20 Hz. The results do show that the faulty machine with the broken rotor consistently recorded more Braggshifts than the healthy motor at all frequencies. This resulted in a distinct and aberrant sensing profile which detects the fault in a non-intrusive manner. The FBG-T sensor used in this way offers a huge potential in non-intrusive machine condition monitoring which crucially overcomes the ease of breakage of the fibre when installed inside the motor leading to offline intervention to replace the sensor and maximal downtime and cost.