diff --git a/app/client/cypress/e2e/Regression/ClientSide/VisualTests/JSEditorIndent_spec.js b/app/client/cypress/e2e/Regression/ClientSide/VisualTests/JSEditorIndent_spec.js
index a95ee658fe..0d50efea49 100644
--- a/app/client/cypress/e2e/Regression/ClientSide/VisualTests/JSEditorIndent_spec.js
+++ b/app/client/cypress/e2e/Regression/ClientSide/VisualTests/JSEditorIndent_spec.js
@@ -4,6 +4,8 @@ import {
   entityExplorer,
   homePage,
   jsEditor,
+  apiPage,
+  dataSources,
 } from "../../../../support/Objects/ObjectsCore";
 
 describe("JSEditor Indendation - Visual tests", () => {
@@ -341,4 +343,21 @@ myFun2: async () => {
     cy.get("div.CodeMirror").type("{cmd+leftArrow}");
     cy.get("div.CodeMirror").matchImageSnapshot("jsObjAfterGoLineStartSmart5");
   });
+
+  it("5. Bug 25325 Check if the JS Object in body field is formatted properly on save", () => {
+    apiPage.CreateApi("FirstAPI");
+    apiPage.SelectPaneTab("Body");
+    apiPage.SelectSubTab("JSON");
+    dataSources.EnterQuery(
+      `{{
+        {
+          "title": this.params.title,
+              "due": this.params.due,
+                  assignee: this.params.assignee 
+                  }
+      }}`,
+    );
+    cy.get("body").type(agHelper.isMac ? "{meta}S" : "{ctrl}S");
+    cy.get(apiPage.jsonBody).matchImageSnapshot("formattedJSONBodyAfterSave");
+  });
 });
diff --git a/app/client/cypress/snapshots/JSEditorIndent_spec.js/formattedJSONBodyAfterSave.snap.png b/app/client/cypress/snapshots/JSEditorIndent_spec.js/formattedJSONBodyAfterSave.snap.png
new file mode 100644
index 0000000000..1f9afa4c18
Binary files /dev/null and b/app/client/cypress/snapshots/JSEditorIndent_spec.js/formattedJSONBodyAfterSave.snap.png differ
diff --git a/app/client/cypress/support/Pages/ApiPage.ts b/app/client/cypress/support/Pages/ApiPage.ts
index 8cce371591..c15da6cbcc 100644
--- a/app/client/cypress/support/Pages/ApiPage.ts
+++ b/app/client/cypress/support/Pages/ApiPage.ts
@@ -79,6 +79,7 @@ export class ApiPage {
   _addMore = ".t--addApiHeader";
   public _editorDS = ".t--datasource-editor";
   public _addMoreHeaderFieldButton = ".t--addApiHeader";
+  public jsonBody = `.t--apiFormPostBody`;
 
   CreateApi(
     apiName = "",
diff --git a/app/client/src/components/editorComponents/CodeEditor/modes.ts b/app/client/src/components/editorComponents/CodeEditor/modes.ts
index b107e29162..ab3d6bb07a 100644
--- a/app/client/src/components/editorComponents/CodeEditor/modes.ts
+++ b/app/client/src/components/editorComponents/CodeEditor/modes.ts
@@ -90,6 +90,7 @@ Object.keys(MULTIPLEXING_MODE_CONFIGS).forEach((key) => {
         delimStyle: "binding-brackets",
         mode: CodeMirror.getMode(config, {
           name: "javascript",
+          json: true,
         }),
       })),
     );