The propulsion system of Armoured Fighting Vehicles (AFV) demand compact, fuel efficient, high specific power output engines. Diesel engines have matured and still unique source of power for the Battle Tanks. Mechanical System Laboratory (MSL) of Combat Vehicles Research and Development Establishment (CVRDE) has carried out extensive performance evaluation and testing of various AFV engines. The requirement of futuristic combat vehicles has called for development of a new Engine Test Facility capable of testing engines up to 1500 kW. The facility consists of an Eddy current dynamometer for lower ranges and a hydraulic dynamometer for higher power ranges. The facility consists of dynamometer, dynamometer controller, engine throttle controller, measuring devices like fuel consumption meter, blow by meter, smoke meter, air mass flow meter, and the data acquisition system. The test facility is housed in a new Laboratory building. The utility systems of Engine test house are; Acoustic insulation of the test cell and control room, Test cell air induction and exhaust system, Engine air exhaust system, Cooling system, Compressed air system, Fuel storage system, Fuel supply line to test cell, Lubrication oil supply system, Floating bed foundation, Material handling system and the fire alarm & suppression system. This paper briefly describes about engine testing and design philosophy of new test facility, test equipment, the infrastructure and its capabilities.