diff --git a/packages/js/src/utils/package-json/update-package-json.spec.ts b/packages/js/src/utils/package-json/update-package-json.spec.ts
index c627c25889fd9..0a8f44ca810dd 100644
--- a/packages/js/src/utils/package-json/update-package-json.spec.ts
+++ b/packages/js/src/utils/package-json/update-package-json.spec.ts
@@ -290,7 +290,7 @@ describe('updatePackageJson', () => {
   const fileMap = {
     '@org/lib1': [
       {
-        file: 'test.ts',
+        file: 'libs/lib1/src/test.ts',
         hash: '',
         deps: ['npm:external1', 'npm:external2'],
       },
diff --git a/packages/nx/src/plugins/js/package-json/create-package-json.ts b/packages/nx/src/plugins/js/package-json/create-package-json.ts
index c84ad7ea027a5..bdf376be4eb5d 100644
--- a/packages/nx/src/plugins/js/package-json/create-package-json.ts
+++ b/packages/nx/src/plugins/js/package-json/create-package-json.ts
@@ -16,6 +16,7 @@ import {
 import { readNxJson } from '../../../config/configuration';
 import { readProjectFileMapCache } from '../../../project-graph/nx-deps-cache';
 import { join } from 'path';
+import { file } from 'tmp';
 
 interface NpmDeps {
   readonly dependencies: Record<string, string>;
@@ -222,6 +223,17 @@ export function findProjectsNpmDependencies(
   return npmDeps;
 }
 
+// this function checks if the file path in in the root and not index.ts file
+// these files are likely configuration files
+function isIndexOrNonRoot(filePath: string, root: string): boolean {
+  if (filePath.slice(root.length + 1).includes('/')) {
+    return true;
+  }
+  return ['index.ts', 'index.js', 'index.jsx', 'index.tsx'].some(
+    (f) => `${root}/${f}` === filePath
+  );
+}
+
 function findAllNpmDeps(
   projectFileMap: ProjectFileMap,
   projectNode: ProjectGraphProjectNode,
@@ -240,7 +252,7 @@ function findAllNpmDeps(
     projectNode.data.root,
     projectFileMap[projectNode.name] || [],
     rootPatterns ?? dependencyPatterns
-  );
+  ).filter((f) => isIndexOrNonRoot(f.file, projectNode.data.root));
 
   const projectDependencies = new Set<string>();