@@ -353,6 +353,11 @@ def _clone_repo(
                 os.makedirs(module_abspath_dir)
             module_checkout_path = osp.join(str(repo.working_tree_dir), path)
 
+        if url.startswith("../"):
+            remote_name = repo.active_branch.tracking_branch().remote_name
+            repo_remote_url = repo.remote(remote_name).url
+            url = os.path.join(repo_remote_url, url)
+
         clone = git.Repo.clone_from(
             url,
             module_checkout_path,
 
@@ -753,6 +753,22 @@ def test_add_empty_repo(self, rwdir):
             )
         # END for each checkout mode
 
+    @with_rw_directory
+    @_patch_git_config("protocol.file.allow", "always")
+    def test_update_submodule_with_relative_path(self, rwdir):
+        repo_path = osp.join(rwdir, "parent")
+        repo = git.Repo.init(repo_path)
+        module_repo_path = osp.join(rwdir, "module")
+        module_repo = git.Repo.init(module_repo_path)
+        module_repo.git.commit(m="test", allow_empty=True)
+        repo.git.submodule("add", "../module", "module")
+        repo.index.commit("add submodule")
+
+        cloned_repo_path = osp.join(rwdir, "cloned_repo")
+        cloned_repo = git.Repo.clone_from(repo_path, cloned_repo_path)
+
+        cloned_repo.submodule_update(init=True, recursive=True)
+
     @with_rw_directory
     @_patch_git_config("protocol.file.allow", "always")
     def test_list_only_valid_submodules(self, rwdir):