Automotive clutches form the most important component in the drive line which acts both as torque transmitter and as a fuse. Testing clutches, in the vehicle assembly, poses certain limitations. In this context the automotive clutch, as a component, needs to be evaluated to determine various performance parameters like wear, load loss, slipping torque, slipping time etc. to meet desired design, performance and durability requirements. It is very important to simulate engine and vehicle conditions in terms of operating environment, speed and load accurately while evaluating above parameters.This creates lot of challenges to design and develop a test rig capable of evaluating complete clutch performance. Very limited options are available for such test rigs worldwide. In India, no manufacturer provides such indigenous test rigs. Developing an indigenous, cost effective clutch test rig was the need of the hour. An indigenous, cost effective and customized clutch test rig was developed in collaboration one of India’s leading clutch manufacturer.The present such test rig developed caters to multi plate, wet clutches for 2W vehicles ranging between 100 cc to 1200 cc engine capacity; the concept can be extended for testing of dry type clutches also. The test rig is designed to operate and test clutches up to 300 Nm and 10000 rpm with complete electrical inertia simulation.Major challenges for such tests rigs are accuracy & response times for speed and torque control, maintaining engine environment conditions in terms of oil/air flow & temperature, precise, variable and fast clutch actuation etc. This paper elaborates the challenges faced in conceptualization, design and development of the clutch test rig in terms of different aspects viz.; controls automation, accuracy, precision and correlation to real world conditions and results.