Hardware-In-Loop Simulation (HILS) is the only platform where the dynamics of the subsystem is tested and onboard software is validated in real time environment before the flight trial. The flight systems consist of navigation, guidance and control. The Inertial Navigation system (INS) which is embedded system is sending the required navigation information for the guidance and control algorithm which resides in on-board computer-OBC (embedded system). The plant model is used to create environment near flight condition and to validate guidance and control as well as navigation. The newly developed navigation package based on MIL-STD 1553 communication protocol introduced in HILS for total trajectory dynamics validation in different phases. Firstly the navigation algorithm resided in INS isvalidated and the sensors i.e. gyros are excited in next step to test for delays, and non linearity. The total methodology adopted for the testing of the navigation package-INS is presented in this paper.