diff --git a/confluent_server/confluent/syncfiles.py b/confluent_server/confluent/syncfiles.py
index f2071fa2..70558a57 100644
--- a/confluent_server/confluent/syncfiles.py
+++ b/confluent_server/confluent/syncfiles.py
@@ -47,7 +47,12 @@ def get_entries(filename):
         if ent in ('APPENDONCE:', 'MERGE:', 'REPLACE:'):
             secname = ent
         if ent[0] == '<':
-            for subent in get_entries(ent[1:]):
+            subfilename = ent[1:]
+            if subfilename[-1] == '>':
+                subfilename = subfilename[:-1]
+            if subfilename[0] != '/':
+                subfilename = os.path.join(os.path.dirname(filename), subfilename)
+            for subent in get_entries(subfilename):
                 yield subent
             yield secname
         else:
diff --git a/imgutil/imgutil b/imgutil/imgutil
index a944cc1e..416266ad 100644
--- a/imgutil/imgutil
+++ b/imgutil/imgutil
@@ -424,6 +424,11 @@ class OsHandler(object):
             if not pkg:
                 continue
             if pkg[0] == '<':  # Include from specified file
+                subfilename = pkg[1:]
+                if subfilename[-1] == '>':
+                    subfilename = subfilename[:-1]
+                if subfilename[0] != '/':
+                    subfilename = os.path.join(os.path.dirname(pkglistfile), subfilename)
                 retpkgs.extend(self.list_packages(pkg[1:]))
             else:
                 retpkgs.append(pkg)