diff --git a/.gitignore b/.gitignore
index 5860fb1b..2edd0038 100644
--- a/.gitignore
+++ b/.gitignore
@@ -59,3 +59,6 @@ soak-results/
 
 # LSP originality-check reference cache (scripts/check-lsp-originality.sh)
 .lsp-refs/
+
+# Local npm cache
+graph-ui/.npm-cache-local/
diff --git a/graph-ui/src/components/StatsTab.test.tsx b/graph-ui/src/components/StatsTab.test.tsx
new file mode 100644
index 00000000..4b288bfa
--- /dev/null
+++ b/graph-ui/src/components/StatsTab.test.tsx
@@ -0,0 +1,106 @@
+import { describe, it, expect, vi, beforeEach, afterEach } from "vitest";
+import { render, screen, fireEvent, act } from "@testing-library/react";
+import { IndexProgress } from "./StatsTab";
+import "@testing-library/jest-dom";
+
+describe("IndexProgress", () => {
+  beforeEach(() => {
+    vi.useFakeTimers();
+  });
+
+  afterEach(() => {
+    vi.useRealTimers();
+    vi.restoreAllMocks();
+  });
+
+  it("polls and shows indexing in progress when active", async () => {
+    const fetchMock = vi.fn().mockImplementation(() =>
+      Promise.resolve({
+        json: () => Promise.resolve([
+          { slot: 1, status: "indexing", path: "/path/to/project1" }
+        ])
+      } as unknown as Response)
+    );
+    vi.stubGlobal("fetch", fetchMock);
+
+    const onDone = vi.fn();
+    render(<IndexProgress onDone={onDone} />);
+
+    // Fast-forward initial poll
+    await act(async () => {
+      await vi.advanceTimersByTimeAsync(2000);
+    });
+
+    expect(fetchMock).toHaveBeenCalledWith("/api/index-status");
+    expect(screen.getByText("Indexing in progress")).toBeInTheDocument();
+    expect(screen.getByText("/path/to/project1")).toBeInTheDocument();
+    expect(onDone).not.toHaveBeenCalled();
+  });
+
+  it("stops polling and calls onDone when indexing finishes successfully", async () => {
+    let mockData = [
+      { slot: 1, status: "indexing", path: "/path/to/project" }
+    ];
+    const fetchMock = vi.fn().mockImplementation(() =>
+      Promise.resolve({
+        json: () => Promise.resolve(mockData)
+      } as unknown as Response)
+    );
+    vi.stubGlobal("fetch", fetchMock);
+
+    const onDone = vi.fn();
+    render(<IndexProgress onDone={onDone} />);
+
+    // First poll returns active
+    await act(async () => {
+      await vi.advanceTimersByTimeAsync(2000);
+    });
+    expect(onDone).not.toHaveBeenCalled();
+
+    // Indexing finishes
+    mockData = [];
+
+    await act(async () => {
+      await vi.advanceTimersByTimeAsync(2000);
+    });
+
+    expect(onDone).toHaveBeenCalled();
+  });
+
+  it("renders error banner and does NOT call onDone when indexing fails with error status", async () => {
+    const fetchMock = vi.fn().mockImplementation(() =>
+      Promise.resolve({
+        json: () => Promise.resolve([
+          { slot: 1, status: "error", path: "/path/to/failed-project", error: "OOM Error" }
+        ])
+      } as unknown as Response)
+    );
+    vi.stubGlobal("fetch", fetchMock);
+
+    const onDone = vi.fn();
+    render(<IndexProgress onDone={onDone} />);
+
+    await act(async () => {
+      await vi.advanceTimersByTimeAsync(2000);
+    });
+
+    // Error banner should show up
+    expect(screen.getByText("Indexing Failed")).toBeInTheDocument();
+    expect(screen.getByText("/path/to/failed-project")).toBeInTheDocument();
+    expect(screen.getByText("OOM Error")).toBeInTheDocument();
+
+    // onDone should not be called automatically
+    expect(onDone).not.toHaveBeenCalled();
+
+    // Click Dismiss button
+    const dismissBtn = screen.getByRole("button", { name: /Dismiss/i });
+    expect(dismissBtn).toBeInTheDocument();
+    
+    await act(async () => {
+      fireEvent.click(dismissBtn);
+    });
+
+    // onDone should be called after manual dismissal
+    expect(onDone).toHaveBeenCalled();
+  });
+});
diff --git a/graph-ui/src/components/StatsTab.tsx b/graph-ui/src/components/StatsTab.tsx
index 98890271..9b8fec10 100644
--- a/graph-ui/src/components/StatsTab.tsx
+++ b/graph-ui/src/components/StatsTab.tsx
@@ -273,20 +273,36 @@ function CreateIndexModal({ onClose, onCreated }: { onClose: () => void; onCreat
 
 /* ── Index Progress ─────────────────────────────────────── */
 
-function IndexProgress({ onDone }: { onDone: () => void }) {
-  const [jobs, setJobs] = useState<{ slot: number; status: string; path: string }[]>([]);
+export function IndexProgress({ onDone }: { onDone: () => void }) {
+  const [jobs, setJobs] = useState<{ slot: number; status: string; path: string; error?: string }[]>([]);
+  const [hasActive, setHasActive] = useState(true);
+
   useEffect(() => {
+    if (!hasActive) return;
     const poll = setInterval(async () => {
       try {
         const data = await (await fetch("/api/index-status")).json();
         setJobs(data);
-        if (data.length > 0 && data.every((j: { status: string }) => j.status !== "indexing")) onDone();
-      } catch { /* */ }
+        const stillIndexing = data.some((j: { status: string }) => j.status === "indexing");
+        if (!stillIndexing) {
+          setHasActive(false);
+          const hasErrors = data.some((j: { status: string }) => j.status === "error");
+          if (!hasErrors) {
+            onDone();
+          }
+        }
+      } catch (error) {
+        console.error("[IndexProgress] Poll failed:", error);
+      }
     }, 2000);
     return () => clearInterval(poll);
-  }, [onDone]);
+  }, [onDone, hasActive]);
+
   const active = jobs.filter((j) => j.status === "indexing");
-  if (active.length === 0) return null;
+  const errors = jobs.filter((j) => j.status === "error");
+
+  if (active.length === 0 && errors.length === 0) return null;
+
   return (
     <div className="rounded-xl border border-primary/20 bg-primary/5 p-4 mb-6">
       {active.map((j) => (
@@ -298,6 +314,26 @@ function IndexProgress({ onDone }: { onDone: () => void }) {
           </div>
         </div>
       ))}
+      {errors.map((j) => (
+        <div key={j.slot} className="flex items-start gap-3 mt-3 first:mt-0 p-3 rounded-lg border border-destructive/20 bg-destructive/5 text-destructive">
+          <span className="text-[14px]">⚠️</span>
+          <div className="flex-1 min-w-0">
+            <p className="text-[12px] font-semibold">Indexing Failed</p>
+            <p className="text-[11px] font-mono truncate">{j.path}</p>
+            {j.error && <p className="text-[10px] opacity-75 mt-1 font-mono">{j.error}</p>}
+          </div>
+        </div>
+      ))}
+      {errors.length > 0 && (
+        <div className="flex justify-end mt-3">
+          <button
+            onClick={onDone}
+            className="px-3 py-1 rounded bg-destructive/10 hover:bg-destructive/20 text-destructive text-[11px] font-medium transition-all"
+          >
+            Dismiss
+          </button>
+        </div>
+      )}
     </div>
   );
 }
diff --git a/graph-ui/vite.config.ts b/graph-ui/vite.config.ts
index 0d02daf8..d7a3a0b8 100644
--- a/graph-ui/vite.config.ts
+++ b/graph-ui/vite.config.ts
@@ -1,3 +1,4 @@
+/// <reference types="vitest" />
 import { defineConfig } from "vite";
 import react from "@vitejs/plugin-react";
 import tailwindcss from "@tailwindcss/vite";
@@ -10,6 +11,10 @@ export default defineConfig({
       "@": path.resolve(__dirname, "./src"),
     },
   },
+  test: {
+    environment: "jsdom",
+    globals: true,
+  },
   build: {
     outDir: "dist",
     assetsDir: "assets",