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As you can see in image below, thread_processor and order_processor is in the same folder as, yet it does not recognize as a module.
Its is looking only at the root folder ..

even adding below code in launch.json is not helping either … THanks

"configurations": [
        "name": "Python",
        "type": "python",
        "stopOnEntry": false,
        "request": "launch",
        "pythonPath": "${config.python.pythonPath}",
        "program": "${file}",
        "cwd": "${workspaceRoot}",
        "debugOptions": [
        "env": {
            "PYTHONPATH": "/src/order_processing_engine"

enter image description here



  1. Chosen as BEST ANSWER

    Add your folder in extraPaths as below

        "python.analysis.extraPaths": [

    enter image description here

  2. Since your folder is a package, you can use a relative import. E.g., from .thread_extractor import get_next_thread

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