diff --git a/bin/helpers/utils.js b/bin/helpers/utils.js
index c59c9785..fe2e9f50 100644
--- a/bin/helpers/utils.js
+++ b/bin/helpers/utils.js
@@ -329,7 +329,6 @@ exports.getLocalFlag = (connectionSettings) => {
 };
 
 exports.setLocal = (bsConfig, args) => {
-  let localInferred = !(this.searchForOption('--local-mode'));
   if (!this.isUndefined(args.local)) {
     let local = false;
     if (String(args.local).toLowerCase() === 'true') {
@@ -345,12 +344,19 @@ exports.setLocal = (bsConfig, args) => {
     logger.info(
       'Reading local setting from the environment variable BROWSERSTACK_LOCAL'
     );
+  } else if (!this.isUndefined(bsConfig['connection_settings']['local'])) {
+    let local = false;
+    if (String(bsConfig['connection_settings']['local']).toLowerCase() === 'true') {
+      local = true;
+    }
+    bsConfig['connection_settings']['local'] = local;
   } else if (
     this.isUndefined(bsConfig['connection_settings']['local']) &&
-    ( !this.isUndefined(args.localMode) || !this.isUndefined(bsConfig['connection_settings']['local_mode']) )
+    (!this.isUndefined(args.localMode) ||
+      !this.isUndefined(bsConfig['connection_settings']['local_mode']))
   ) {
     bsConfig['connection_settings']['local'] = true;
-    bsConfig.connection_settings.local_inferred = localInferred;
+    bsConfig.connection_settings.local_inferred = true;
   }
 };
 
diff --git a/test/unit/bin/helpers/utils.js b/test/unit/bin/helpers/utils.js
index 84bb8997..5ce5ef9a 100644
--- a/test/unit/bin/helpers/utils.js
+++ b/test/unit/bin/helpers/utils.js
@@ -676,7 +676,7 @@ describe('utils', () => {
       delete process.env.BROWSERSTACK_LOCAL;
     });
 
-    it('bsconfig connection_settings local_inferred as true if serachforOption returns false with args local-mode true', () => {
+    it('bsconfig connection_settings local_inferred as true if args local-mode true', () => {
       let bsConfig = {
         connection_settings: {
         }
@@ -684,8 +684,6 @@ describe('utils', () => {
       let args = {
         localMode: "always-on"
       };
-      let searchForOptionStub = sinon.stub(utils,"searchForOption");
-      searchForOptionStub.returns(false);
       utils.setLocal(bsConfig,args);
       expect(bsConfig.connection_settings.local_inferred).to.be.eq(true);
     });
@@ -726,14 +724,13 @@ describe('utils', () => {
       expect(bsConfig.connection_settings.local).to.be.eq(false);
     });
 
-    it('should change local to true in bsConfig if process.env.BROWSERSTACK_LOCAL is set to true', () => {
+    it('should change local to true in bsConfig if args.local is set to true', () => {
       let bsConfig = {
         connection_settings: {
           local: false,
         },
       };
-      let args = {};
-      process.env.BROWSERSTACK_LOCAL = true;
+      let args = { local: true };
       utils.setLocal(bsConfig,args);
       expect(bsConfig.connection_settings.local).to.be.eq(true);
     });
@@ -748,6 +745,19 @@ describe('utils', () => {
       utils.setLocal(bsConfig,args);
       expect(bsConfig.connection_settings.local).to.be.eq(true);
     });
+
+    it('should set local to true in bsConfig if local is passed as string in bsConfig', () => {
+      let bsConfig = {
+        connection_settings: {
+          local: "true"
+        },
+      };
+      let args = {
+      };
+      utils.setLocal(bsConfig, args);
+      expect(bsConfig.connection_settings.local).to.be.eq(true);
+    });
+
   });
 
   describe('setLocalMode', () => {