Identifying a downed conductor in distribution is challenging due to the insignificant variations in the current signal. Most of the distribution system faults are identified using overcurrent and earth fault protection. Fault path resistance decides the current magnitude while high resistance path may create timely issues in identifying a fault. Downed conductor and high resistance faults create arc in between the ground and conductor. Due to this the fault at the location is highly nonlinear with reduced magnitude. These faults are known as high impedance arcing fault (HIAF). Such faults can be identified effectively by conducting harmonic analysis of the signals. But in a modern distribution system apart from other renewable sources, the integration of electric vehicle (EV) may create HIAF detection challenges due to the inclusion of inverters and switching harmonics associated with EV. Considering the available advanced architecture of modern microgrid system, an effective solution is proposed in this work to securely detect HIAFs. The method is robust and highly reliable for HIAFs. The system stability and continuity can be unaffected with the help of the proposed method in case of various non-fault or transient/switching conditions. Comparison with other profound techniques is done to show the superiority of the proposed method.