Abstract Type tests are essential to assess the short circuit withstand capabilities of transformer windings. The mechanical durability of power equipment are checked against the mechanical forces developed during making/breaking short circuit operations. These type tests are generally carried out in indoor transformer test laboratories. Testing of Power Transformer for size more than 200 MVA in 765/400 kV voltage class in an indoor laboratory is not economically feasible. Now a days, power transformer manufacturers are fabricating single phase auto- power transformers of size up to 630 megawatt volt ampere (MVA) rating. Type testing of these transformers in indoor laboratories is not feasible. In view of this, strong short circuit fault feeding capabilities of the national grids can be utilized for type testing of these power transformers in an online manner. However, this may affect the grid operation/control during weak grid operating conditions. Recently, National High Power Testing Laboratory is established for testing of power transformer upto of 630 MVA. This is a unique online transformer test facility for testing of 765/400/220/132 kV class power transformers. An offline simulation has been carried out in this article, to assess the impact of online type testing on the Indian National grid. In this article, an online testing scheme has been presented which enables the national grid operator to analysis the prevailing grid condition & subsequently to decide the safe rating of the power transformer for online testing. The simulated results are cross checked with field results and it is found that simulated results are close to actual field results. The concurrence of simulated and field results helped in successfully commissioning of the testing laboratory.