diff --git a/internal/npm_install/npm_install.bzl b/internal/npm_install/npm_install.bzl
index 037bf479e3..611e11cbb9 100644
--- a/internal/npm_install/npm_install.bzl
+++ b/internal/npm_install/npm_install.bzl
@@ -339,12 +339,18 @@ def _yarn_install_impl(repository_ctx):
 
     # The entry points for npm install for osx/linux and windows
     if not is_windows_host:
-        # Prefix filenames with _ so they don't conflict with the npm packages
+        # Prefix filenames with _ so they don't conflict with the npm packages.
+        # Unset YARN_IGNORE_PATH before calling yarn incase it is set so that
+        # .yarnrc yarn-path is followed if set. This is for the case when calling
+        # bazel from yarn with `yarn bazel ...` and yarn follows yarn-path in
+        # .yarnrc it will set YARN_IGNORE_PATH=1 which will prevent the bazel
+        # call into yarn from also following the yarn-path as desired.
         repository_ctx.file(
             "_yarn.sh",
             content = """#!/usr/bin/env bash
 # Immediately exit if any command fails.
 set -e
+unset YARN_IGNORE_PATH
 (cd "{root}"; "{yarn}" {yarn_args})
 """.format(
                 root = root,
@@ -357,6 +363,7 @@ set -e
         repository_ctx.file(
             "_yarn.cmd",
             content = """@echo off
+set "YARN_IGNORE_PATH=" 
 cd "{root}" && "{yarn}" {yarn_args}
 """.format(
                 root = root,