Test chemical engineers by proxy (7)
'test chemical' is the definition.
(chemical used in a test or analysis)
'engineers by proxy' is the wordplay.
'engineers' becomes 're' (Royal Engineers).
'by' says to put letters next to each other.
'proxy' becomes 'agent' (both can mean a representative).
(Other definitions for reagent that I've seen before include "Substance with characteristic reactions, used as a chemical test", "Chemical with known properties", "Reacting substance", "Get near (anag) - substance used in chemistry", "Chemically active substance".)