The question asks which city hosts the designated testing facility for biological products (like vaccines and sera) in India. Rather than recalling the answer directly, let's reason from what we know about India's drug-testing infrastructure and eliminate cities that are known for other regulatory functions.
Since only Kasauli is specifically tied to the historic national biologicals-testing facility, while the other cities are pharmaceutical or commercial centres without that specific role, Kasauli stands out as the answer.
Therefore, the correct answer is Kasauli.