diff --git a/ghcide b/ghcide
index 0bfce3114c..c1678223bb 160000
--- a/ghcide
+++ b/ghcide
@@ -1 +1 @@
-Subproject commit 0bfce3114c28bd00f7bf5729c32ec0f23a8d8854
+Subproject commit c1678223bbe9ec73628888ef466e0e471258040c
diff --git a/plugins/default/src/Ide/Plugin/Eval.hs b/plugins/default/src/Ide/Plugin/Eval.hs
index f59650b0f6..cad3c0b588 100644
--- a/plugins/default/src/Ide/Plugin/Eval.hs
+++ b/plugins/default/src/Ide/Plugin/Eval.hs
@@ -35,13 +35,14 @@ import           Data.Bifunctor             (Bifunctor (first))
 import           Data.Char                  (isSpace)
 import qualified Data.HashMap.Strict        as Map
 import           Data.List                  (find)
-import           Data.Maybe                 (catMaybes)
+import           Data.Maybe                 (fromMaybe, catMaybes)
 import           Data.String                (IsString (fromString))
 import           Data.Text                  (Text)
 import qualified Data.Text                  as T
 import           Data.Time                  (getCurrentTime)
 import           Development.IDE
-import           Development.IDE.GHC.Compat (DynFlags, ExecResult (..), GeneralFlag (Opt_IgnoreHpcChanges, Opt_IgnoreOptimChanges, Opt_ImplicitImportQualified),
+import           Development.IDE.GHC.Compat (DynFlags(importPaths), ExecResult (..),
+                                             GeneralFlag (Opt_IgnoreHpcChanges, Opt_IgnoreOptimChanges, Opt_ImplicitImportQualified),
                                              Ghc, GhcLink (LinkInMemory),
                                              GhcMode (CompManager),
                                              HscTarget (HscInterpreted),
@@ -61,10 +62,9 @@ import           Development.IDE.GHC.Compat (DynFlags, ExecResult (..), GeneralF
                                              setTargets, simpleImportDecl,
                                              typeKind, ways)
 import           DynamicLoading             (initializePlugins)
-import           DynFlags                   (targetPlatform)
 import           GHC.Generics               (Generic)
 import           GhcMonad                   (modifySession)
-import           GhcPlugins                 (defaultLogActionHPutStrDoc,
+import           GhcPlugins                 (targetPlatform, defaultLogActionHPutStrDoc,
                                              gopt_set, gopt_unset, interpWays,
                                              updateWays, wayGeneralFlags,
                                              wayUnsetGeneralFlags)
@@ -195,7 +195,11 @@ runEvalCmd lsp state EvalParams {..} = withIndefiniteProgress lsp "Eval" Cancell
     hscEnv' <- ExceptT $
       evalGhcEnv (hscEnv session) $ do
         env <- getSession
+        -- Install the module pragmas and options
         df <- liftIO $ setupDynFlagsForGHCiLike env $ ms_hspp_opts ms
+        -- Restore the cradle import paths
+        df <- return df{importPaths = fromMaybe (importPaths df) $ envImportPaths session}
+        -- Set the modified flags in the session
         _lp <- setSessionDynFlags df
 
         -- copy the package state to the interactive DynFlags
@@ -295,7 +299,7 @@ evalGhciLikeCmd cmd arg = do
   df <- getSessionDynFlags
   case lookup cmd ghciLikeCommands
     <|> snd <$> find (T.isPrefixOf cmd . fst) ghciLikeCommands of
-    Just hndler -> 
+    Just hndler ->
       fmap
         (T.unlines . map ("-- " <>) . T.lines
         )
diff --git a/test/functional/Eval.hs b/test/functional/Eval.hs
index a196ee0485..d9b36ca919 100644
--- a/test/functional/Eval.hs
+++ b/test/functional/Eval.hs
@@ -88,6 +88,8 @@ tests = testGroup
   $ goldenTest "T24.hs"
   , testCase ":kind treats a multilined result properly"
   $ goldenTest "T25.hs"
+  , testCase "local imports"
+  $ goldenTest "T26.hs"
   ]
 
 goldenTest :: FilePath -> IO ()
diff --git a/test/testdata/eval/T26.hs b/test/testdata/eval/T26.hs
new file mode 100644
index 0000000000..424cdf12c5
--- /dev/null
+++ b/test/testdata/eval/T26.hs
@@ -0,0 +1,4 @@
+module T26 where
+import T25 ()
+
+-- >>> "hello"
diff --git a/test/testdata/eval/T26.hs.expected b/test/testdata/eval/T26.hs.expected
new file mode 100644
index 0000000000..bf9ebacc5a
--- /dev/null
+++ b/test/testdata/eval/T26.hs.expected
@@ -0,0 +1,5 @@
+module T26 where
+import T25 ()
+
+-- >>> "hello"
+-- "hello"
diff --git a/test/testdata/eval/hie.yaml b/test/testdata/eval/hie.yaml
index a2e9ed5148..66e96b9b28 100644
--- a/test/testdata/eval/hie.yaml
+++ b/test/testdata/eval/hie.yaml
@@ -1 +1,29 @@
-cradle: {direct: {arguments: ["T1", "T2", "T3", "T4"]}}
+cradle:
+  direct:
+    arguments:
+      - "T1"
+      - "T2"
+      - "T3"
+      - "T4"
+      - "T5"
+      - "T6"
+      - "T7"
+      - "T8"
+      - "T9"
+      - "T10"
+      - "T11"
+      - "T12"
+      - "T13"
+      - "T14"
+      - "T15"
+      - "T16"
+      - "T17"
+      - "T18"
+      - "T19"
+      - "T20"
+      - "T21"
+      - "T22"
+      - "T23"
+      - "T24"
+      - "T25"
+      - "T26"