diff --git a/pkg/server/server.go b/pkg/server/server.go
index 5911affe9..c006543aa 100644
--- a/pkg/server/server.go
+++ b/pkg/server/server.go
@@ -1650,9 +1650,10 @@ func (s *BgpServer) handleFSMMessage(peer *peer, e *fsmMsg) {
 				if allEnd {
 					for _, p := range s.neighborMap {
 						p.fsm.lock.Lock()
+						peerLocalRestarting := p.fsm.pConf.GracefulRestart.State.LocalRestarting
 						p.fsm.pConf.GracefulRestart.State.LocalRestarting = false
 						p.fsm.lock.Unlock()
-						if !p.isGracefulRestartEnabled() {
+						if !p.isGracefulRestartEnabled() && !peerLocalRestarting {
 							continue
 						}
 						paths, _ := s.getBestFromLocal(p, p.configuredRFlist())
@@ -1791,9 +1792,10 @@ func (s *BgpServer) handleFSMMessage(peer *peer, e *fsmMsg) {
 					if allEnd {
 						for _, p := range s.neighborMap {
 							p.fsm.lock.Lock()
+							peerLocalRestarting := p.fsm.pConf.GracefulRestart.State.LocalRestarting
 							p.fsm.pConf.GracefulRestart.State.LocalRestarting = false
 							p.fsm.lock.Unlock()
-							if !p.isGracefulRestartEnabled() {
+							if !p.isGracefulRestartEnabled() && !peerLocalRestarting {
 								continue
 							}
 							paths, _ := s.getBestFromLocal(p, p.negotiatedRFList())
diff --git a/test/scenario_test/graceful_restart_test.py b/test/scenario_test/graceful_restart_test.py
index 798cde4f4..f7617865e 100644
--- a/test/scenario_test/graceful_restart_test.py
+++ b/test/scenario_test/graceful_restart_test.py
@@ -127,11 +127,25 @@ def test_04_add_non_graceful_restart_enabled_peer(self):
         self.bgpds['g3'] = g3
         time.sleep(g3.run())
         g3.add_route('10.10.30.0/24')
-        g1.add_peer(g3)
+        g1.add_peer(g3, graceful_restart=True)
         g3.add_peer(g1)
         g1.wait_for(expected_state=BGP_FSM_ESTABLISHED, peer=g3)
         time.sleep(1)
         self.assertEqual(len(g3.get_global_rib('10.10.20.0/24')), 1)
+        self.assertEqual(len(g1.get_global_rib('10.10.30.0/24')), 1)
+
+        # Restart g1 with graceful restart flag and check that g1 routes are still propagated to g3.
+        g1.stop_gobgp()
+        g3.stop_gobgp()
+        g1.routes = {}
+        g3.routes = {}
+        g1.start_gobgp(graceful_restart=True)
+        g1.add_route('10.10.20.0/24')
+        g3.start_gobgp()
+        g1.wait_for(expected_state=BGP_FSM_ESTABLISHED, peer=g3)
+        time.sleep(1)
+        self.assertEqual(len(g3.get_global_rib('10.10.20.0/24')), 1)
+        g3.add_route('10.10.30.0/24')
 
     def test_05_holdtime_expiry_graceful_restart(self):
         g1 = self.bgpds['g1']