diff --git a/dvc/parsing/__init__.py b/dvc/parsing/__init__.py
index ea30dfd785..7efa4616cd 100644
--- a/dvc/parsing/__init__.py
+++ b/dvc/parsing/__init__.py
@@ -1,4 +1,5 @@
 import logging
+import os
 from collections.abc import Mapping, Sequence
 from copy import deepcopy
 from typing import (
@@ -134,9 +135,19 @@ def make_definition(
 
 class DataResolver:
     def __init__(self, repo: "Repo", wdir: str, d: dict):
+        from dvc.fs import LocalFileSystem
+
         self.fs = fs = repo.fs
+
+        if os.path.isabs(wdir):
+            start = (
+                os.curdir if isinstance(fs, LocalFileSystem) else repo.root_dir
+            )
+            wdir = relpath(wdir, start)
+            wdir = "" if wdir == os.curdir else wdir
+
         self.wdir = wdir
-        self.relpath = relpath(fs.path.join(self.wdir, "dvc.yaml"))
+        self.relpath = os.path.normpath(fs.path.join(self.wdir, "dvc.yaml"))
 
         vars_ = d.get(VARS_KWD, [])
         check_interpolations(vars_, VARS_KWD, self.relpath)
diff --git a/dvc/parsing/context.py b/dvc/parsing/context.py
index 2e95594c3b..98db8852f5 100644
--- a/dvc/parsing/context.py
+++ b/dvc/parsing/context.py
@@ -19,7 +19,6 @@
     recurse,
     str_interpolate,
 )
-from dvc.utils import relpath
 
 logger = logging.getLogger(__name__)
 SeqOrMap = Union[Sequence, Mapping]
@@ -359,20 +358,19 @@ def load_from(
     ) -> "Context":
         from dvc.utils.serialize import LOADERS
 
-        file = relpath(path)
         if not fs.exists(path):
-            raise ParamsLoadError(f"'{file}' does not exist")
+            raise ParamsLoadError(f"'{path}' does not exist")
         if fs.isdir(path):
-            raise ParamsLoadError(f"'{file}' is a directory")
+            raise ParamsLoadError(f"'{path}' is a directory")
 
-        _, ext = os.path.splitext(file)
+        _, ext = os.path.splitext(path)
         loader = LOADERS[ext]
 
         data = loader(path, fs=fs)
         if not isinstance(data, Mapping):
             typ = type(data).__name__
             raise ParamsLoadError(
-                f"expected a dictionary, got '{typ}' in file '{file}'"
+                f"expected a dictionary, got '{typ}' in file '{path}'"
             )
 
         if select_keys:
@@ -381,12 +379,12 @@ def load_from(
             except KeyError as exc:
                 key, *_ = exc.args
                 raise ParamsLoadError(
-                    f"could not find '{key}' in '{file}'"
+                    f"could not find '{key}' in '{path}'"
                 ) from exc
 
-        meta = Meta(source=file, local=False)
+        meta = Meta(source=path, local=False)
         ctx = cls(data, meta=meta)
-        ctx.imports[os.path.abspath(path)] = select_keys
+        ctx.imports[path] = select_keys
         return ctx
 
     def merge_update(self, other: "Context", overwrite=False):
@@ -397,26 +395,26 @@ def merge_update(self, other: "Context", overwrite=False):
 
     def merge_from(self, fs, item: str, wdir: str, overwrite=False):
         path, _, keys_str = item.partition(":")
-        select_keys = lfilter(bool, keys_str.split(",")) if keys_str else None
+        path = os.path.normpath(fs.path.join(wdir, path))
 
-        abspath = os.path.abspath(fs.path.join(wdir, path))
-        if abspath in self.imports:
-            if not select_keys and self.imports[abspath] is None:
+        select_keys = lfilter(bool, keys_str.split(",")) if keys_str else None
+        if path in self.imports:
+            if not select_keys and self.imports[path] is None:
                 return  # allow specifying complete filepath multiple times
-            self.check_loaded(abspath, item, select_keys)
+            self.check_loaded(path, item, select_keys)
 
-        ctx = Context.load_from(fs, abspath, select_keys)
+        ctx = Context.load_from(fs, path, select_keys)
 
         try:
             self.merge_update(ctx, overwrite=overwrite)
         except ReservedKeyError as exc:
             raise ReservedKeyError(exc.keys, item) from exc
 
-        cp = ctx.imports[abspath]
-        if abspath not in self.imports:
-            self.imports[abspath] = cp
+        cp = ctx.imports[path]
+        if path not in self.imports:
+            self.imports[path] = cp
         elif cp:
-            self.imports[abspath].extend(cp)
+            self.imports[path].extend(cp)
 
     def check_loaded(self, path, item, keys):
         if not keys and isinstance(self.imports[path], list):
diff --git a/dvc/repo/params/show.py b/dvc/repo/params/show.py
index 701dec1ce8..15d906a3b4 100644
--- a/dvc/repo/params/show.py
+++ b/dvc/repo/params/show.py
@@ -10,7 +10,12 @@
 from dvc.scm import NoSCMError
 from dvc.stage import PipelineStage
 from dvc.ui import ui
-from dvc.utils import error_handler, errored_revisions, onerror_collect
+from dvc.utils import (
+    error_handler,
+    errored_revisions,
+    onerror_collect,
+    relpath,
+)
 from dvc.utils.serialize import LOADERS
 
 if TYPE_CHECKING:
@@ -85,10 +90,20 @@ def _read_params(
 
 
 def _collect_vars(repo, params) -> Dict:
+    from dvc.fs.git import GitFileSystem
+
     vars_params: Dict[str, Dict] = defaultdict(dict)
+    rel_to_root = relpath(repo.root_dir)
+
     for stage in repo.index.stages:
         if isinstance(stage, PipelineStage) and stage.tracked_vars:
             for file, vars_ in stage.tracked_vars.items():
+                if isinstance(repo.fs, GitFileSystem):
+                    # GitFileSystem uses relatively-absolute paths from the
+                    # root of the repo. We need to convert them to relative
+                    # paths based on the current working directory.
+                    file = os.path.normpath(os.path.join(rel_to_root, file))
+
                 # `params` file are shown regardless of `tracked` or not
                 # to reduce noise and duplication, they are skipped
                 if file in params:
diff --git a/tests/func/parsing/test_foreach.py b/tests/func/parsing/test_foreach.py
index cfc10f5465..87ee97f74b 100644
--- a/tests/func/parsing/test_foreach.py
+++ b/tests/func/parsing/test_foreach.py
@@ -386,9 +386,7 @@ def test_foreach_with_interpolated_wdir_and_local_vars(
             }
         },
     }
-    assert resolver.context.imports == {
-        str(tmp_dir / DEFAULT_PARAMS_FILE): None
-    }
+    assert resolver.context.imports == {DEFAULT_PARAMS_FILE: None}
 
 
 def test_foreach_do_syntax_is_checked_once(tmp_dir, dvc, mocker):
diff --git a/tests/func/parsing/test_interpolated_entry.py b/tests/func/parsing/test_interpolated_entry.py
index 21223624fd..6c9650d221 100644
--- a/tests/func/parsing/test_interpolated_entry.py
+++ b/tests/func/parsing/test_interpolated_entry.py
@@ -160,7 +160,7 @@ def test_with_templated_wdir(tmp_dir, dvc):
             DEFAULT_PARAMS_FILE: {"dict.bar": "bar", "dict.ws": "data"},
         }
     }
-    assert resolver.context.imports == {str(tmp_dir / "params.yaml"): None}
+    assert resolver.context.imports == {"params.yaml": None}
     assert resolver.context == {"dict": {"bar": "bar", "ws": "data"}}
 
 
@@ -236,7 +236,7 @@ def test_vars_relpath_overwrite(tmp_dir, dvc):
     }
     resolver = DataResolver(dvc, tmp_dir.fs_path, d)
     resolver.resolve()
-    assert resolver.context.imports == {str(tmp_dir / "params.yaml"): None}
+    assert resolver.context.imports == {"params.yaml": None}
 
 
 @pytest.mark.parametrize("local", [True, False])
diff --git a/tests/func/test_import.py b/tests/func/test_import.py
index 59c732868d..1c9dd986ed 100644
--- a/tests/func/test_import.py
+++ b/tests/func/test_import.py
@@ -600,3 +600,33 @@ def test_circular_import(tmp_dir, dvc, scm, erepo_dir):
             erepo_dir.dvc.imp(
                 os.fspath(tmp_dir), "dir_imported", "circular_import"
             )
+
+
+@pytest.mark.parametrize("paths", ([], ["dir"]))
+def test_parameterized_repo(tmp_dir, dvc, scm, erepo_dir, paths):
+    path = erepo_dir.joinpath(*paths)
+    path.mkdir(parents=True, exist_ok=True)
+    (path / "params.yaml").dump({"out": "foo"})
+    (path / "dvc.yaml").dump(
+        {
+            "stages": {
+                "train": {"cmd": "echo ${out} > ${out}", "outs": ["${out}"]},
+            }
+        }
+    )
+    path.gen({"foo": "foo"})
+    with path.chdir():
+        erepo_dir.dvc.commit(None, force=True)
+        erepo_dir.scm.add_commit(
+            ["params.yaml", "dvc.yaml", "dvc.lock", ".gitignore"],
+            message="init",
+        )
+
+    to_import = os.path.join(*paths, "foo")
+    stage = dvc.imp(os.fspath(erepo_dir), to_import, "foo_imported")
+
+    assert (tmp_dir / "foo_imported").read_text() == "foo"
+    assert stage.deps[0].def_repo == {
+        "url": os.fspath(erepo_dir),
+        "rev_lock": erepo_dir.scm.get_rev(),
+    }
diff --git a/tests/unit/test_context.py b/tests/unit/test_context.py
index 5d942941c0..d89e2ed088 100644
--- a/tests/unit/test_context.py
+++ b/tests/unit/test_context.py
@@ -288,14 +288,13 @@ def test_track(tmp_dir):
         "dct": {"foo": "foo", "bar": "bar", "baz": "baz"},
     }
     fs = LocalFileSystem()
-    path = tmp_dir / "params.yaml"
-    path.dump(d, fs=fs)
+    (tmp_dir / "params.yaml").dump(d, fs=fs)
 
-    context = Context.load_from(fs, path)
+    context = Context.load_from(fs, "params.yaml")
 
     def key_tracked(d, key):
         assert len(d) == 1
-        return key in d[relpath(path)]
+        return key in d["params.yaml"]
 
     with context.track() as tracked:
         context.select("lst")
@@ -323,10 +322,10 @@ def test_track_from_multiple_files(tmp_dir):
     d2 = {"Train": {"us": {"layers": 100}}}
 
     fs = LocalFileSystem()
-    path1 = tmp_dir / "params.yaml"
-    path2 = tmp_dir / "params2.yaml"
-    path1.dump(d1, fs=fs)
-    path2.dump(d2, fs=fs)
+    path1 = "params.yaml"
+    path2 = "params2.yaml"
+    (tmp_dir / path1).dump(d1, fs=fs)
+    (tmp_dir / path2).dump(d2, fs=fs)
 
     context = Context.load_from(fs, path1)
     c = Context.load_from(fs, path2)
@@ -428,16 +427,15 @@ def test_resolve_resolves_boolean_value():
 
 def test_load_from_raises_if_file_not_exist(tmp_dir, dvc):
     with pytest.raises(ParamsLoadError) as exc_info:
-        Context.load_from(dvc.fs, tmp_dir / DEFAULT_PARAMS_FILE)
+        Context.load_from(dvc.fs, DEFAULT_PARAMS_FILE)
 
     assert str(exc_info.value) == "'params.yaml' does not exist"
 
 
 def test_load_from_raises_if_file_is_directory(tmp_dir, dvc):
-    data_dir = tmp_dir / "data"
-    data_dir.mkdir()
+    (tmp_dir / "data").mkdir()
 
     with pytest.raises(ParamsLoadError) as exc_info:
-        Context.load_from(dvc.fs, data_dir)
+        Context.load_from(dvc.fs, "data")
 
     assert str(exc_info.value) == "'data' is a directory"