diff --git a/tests/test_ratelimit.py b/tests/test_ratelimit.py
new file mode 100644
index 0000000000..e13d7b8ab9
--- /dev/null
+++ b/tests/test_ratelimit.py
@@ -0,0 +1,99 @@
+# %%
+import asyncio
+import os
+import pytest
+import random
+from typing import Any
+
+from pydantic import BaseModel
+from litellm import utils, Router
+
+COMPLETION_TOKENS = 5
+base_model_list = [
+    {
+        "model_name": "gpt-3.5-turbo",
+        "litellm_params": {
+            "model": "gpt-3.5-turbo",
+            "api_key": os.getenv("OPENAI_API_KEY"),
+            "max_tokens": COMPLETION_TOKENS,
+        },
+    }
+]
+
+
+class RouterConfig(BaseModel):
+    rpm: int
+    tpm: int
+
+
+@pytest.fixture(scope="function")
+def router_factory():
+    def create_router(rpm, tpm):
+        model_list = base_model_list.copy()
+        model_list[0]["rpm"] = rpm
+        model_list[0]["tpm"] = tpm
+        return Router(
+            model_list=model_list,
+            routing_strategy="usage-based-routing",
+            debug_level="DEBUG",
+        )
+
+    return create_router
+
+
+def generate_list_of_messages(num_messages):
+    return [
+        [{"role": "user", "content": f"{i}. Hey, how's it going? {random.random()}"}]
+        for i in range(num_messages)
+    ]
+
+
+def calculate_limits(list_of_messages):
+    rpm = len(list_of_messages)
+    tpm = sum((utils.token_counter(messages=m) + COMPLETION_TOKENS for m in list_of_messages))
+    return rpm, tpm
+
+
+async def async_call(router: Router, list_of_messages) -> Any:
+    tasks = [router.acompletion(model="gpt-3.5-turbo", messages=m) for m in list_of_messages]
+    return await asyncio.gather(*tasks)
+
+
+def sync_call(router: Router, list_of_messages) -> Any:
+    return [router.completion(model="gpt-3.5-turbo", messages=m) for m in list_of_messages]
+
+
+class ExpectNoException(Exception):
+    pass
+
+
+@pytest.mark.parametrize(
+    "num_messages, num_rate_limits",
+    [
+        # (2, 30),  # No exception expected
+        # (2, 3),  # No exception expected
+        (2, 2),  # No exception expected
+        (3, 2),  # Expect ValueError
+        # (6, 5),  # Expect ValueError
+    ],
+)
+@pytest.mark.parametrize("sync_mode", [True, False])  # Use parametrization for sync/async
+def test_rate_limit(router_factory, num_messages, num_rate_limits, sync_mode):
+    expected_exception = ExpectNoException if num_messages <= num_rate_limits else ValueError
+
+    list_of_messages = generate_list_of_messages(max(num_messages, num_rate_limits))
+    rpm, tpm = calculate_limits(list_of_messages[:num_rate_limits])
+    list_of_messages = list_of_messages[:num_messages]
+    router = router_factory(rpm, tpm)
+
+    with pytest.raises(expected_exception) as excinfo:
+        if sync_mode:
+            results = sync_call(router, list_of_messages)
+        else:
+            results = asyncio.run(async_call(router, list_of_messages))
+        raise ExpectNoException
+
+    if expected_exception is not ExpectNoException:
+        assert "No deployments available for selected model" in str(excinfo.value)
+    else:
+        assert len([i for i in results if i is not None]) == num_messages