diff --git a/deploy/docker/tests/test_pg-utils.sh b/deploy/docker/tests/test_pg-utils.sh
new file mode 100755
index 00000000000..fd6e6a67d75
--- /dev/null
+++ b/deploy/docker/tests/test_pg-utils.sh
@@ -0,0 +1,61 @@
+#!/usr/bin/env bash
+
+set -e
+
+# Include the script to be tested
+source /Users/appsmith/Work/appsmith-ce/deploy/docker/fs/opt/appsmith/pg-utils.sh
+
+# Test extract_postgres_db_params function
+test_extract_postgres_db_params_valid_db_string() {
+  local conn_string="postgresql://user:password@localhost:5432/dbname"
+  extract_postgres_db_params "$conn_string"
+
+  if [ "$PG_DB_USER" != "user" ] || [ "$PG_DB_PASSWORD" != "password" ] || [ "$PG_DB_HOST" != "localhost" ] || [ "$PG_DB_PORT" != "5432" ] || [ "$PG_DB_NAME" != "dbname" ]; then
+    echo "Test failed: test_extract_postgres_db_params_valid_db_string did not extract parameters correctly"
+    echo_params
+    exit 1
+  fi
+
+  echo "Test passed: test_extract_postgres_db_params_valid_db_string"
+}
+
+test_extract_postgres_db_params_empty_dbname() {
+  local conn_string="postgresql://user:password@localhost:5432"
+  extract_postgres_db_params "$conn_string"
+
+  if [ "$PG_DB_USER" != "user" ] || [ "$PG_DB_PASSWORD" != "password" ] || [ "$PG_DB_HOST" != "localhost" ] || [ "$PG_DB_PORT" != "5432" ] || [ "$PG_DB_NAME" != "" ]; then
+    echo "Test failed: test_extract_postgres_db_params_empty_dbname did not extract parameters correctly"
+    echo_params
+    exit 1
+  fi
+
+  echo "Test passed: test_extract_postgres_db_params_empty_dbname"
+}
+
+test_extract_postgres_db_params_with_spaces() {
+  local conn_string="postgresql://user:p a s s w o r d@localhost:5432/db_name"
+  extract_postgres_db_params "$conn_string"
+
+  if [ "$PG_DB_USER" != "user" ] || [ "$PG_DB_PASSWORD" != "p%20a%20s%20s%20w%20o%20r%20d" ] || [ "$PG_DB_HOST" != "localhost" ] || [ "$PG_DB_PORT" != "5432" ] || [ "$PG_DB_NAME" != "db_name" ]; then
+    echo "Test failed: test_extract_postgres_db_params_with_spaces did not extract parameters correctly"
+    echo_params
+    exit 1
+  fi
+
+  echo "Test passed: test_extract_postgres_db_params_with_spaces"
+}
+
+echo_params() {
+  echo "PG_DB_USER: $PG_DB_USER"
+  echo "PG_DB_PASSWORD: $PG_DB_PASSWORD"
+  echo "PG_DB_HOST: $PG_DB_HOST"
+  echo "PG_DB_PORT: $PG_DB_PORT"
+  echo "PG_DB_NAME: $PG_DB_NAME"
+}
+
+# Run tests
+test_extract_postgres_db_params_valid_db_string
+test_extract_postgres_db_params_empty_dbname
+test_extract_postgres_db_params_with_spaces
+
+echo "All Tests Pass!"
\ No newline at end of file