diff --git a/server/src/main/java/org/opensearch/cluster/routing/allocation/allocator/RemoteShardsBalancer.java b/server/src/main/java/org/opensearch/cluster/routing/allocation/allocator/RemoteShardsBalancer.java
index a05938c176678..7999faece52ca 100644
--- a/server/src/main/java/org/opensearch/cluster/routing/allocation/allocator/RemoteShardsBalancer.java
+++ b/server/src/main/java/org/opensearch/cluster/routing/allocation/allocator/RemoteShardsBalancer.java
@@ -247,11 +247,17 @@ void balance() {
         final Map<String, Integer> nodePrimaryShardCount = calculateNodePrimaryShardCount(remoteRoutingNodes);
         int totalPrimaryShardCount = nodePrimaryShardCount.values().stream().reduce(0, Integer::sum);
 
-        totalPrimaryShardCount += routingNodes.unassigned().getNumPrimaries();
-        int avgPrimaryPerNode = (totalPrimaryShardCount + routingNodes.size() - 1) / routingNodes.size();
+        int unassignedRemotePrimaryShardCount = 0;
+        for (ShardRouting shard : routingNodes.unassigned()) {
+            if (RoutingPool.REMOTE_CAPABLE.equals(RoutingPool.getShardPool(shard, allocation)) && shard.primary()) {
+                unassignedRemotePrimaryShardCount++;
+            }
+        }
+        totalPrimaryShardCount += unassignedRemotePrimaryShardCount;
+        final int avgPrimaryPerNode = (totalPrimaryShardCount + remoteRoutingNodes.size() - 1) / remoteRoutingNodes.size();
 
-        ArrayDeque<RoutingNode> sourceNodes = new ArrayDeque<>();
-        ArrayDeque<RoutingNode> targetNodes = new ArrayDeque<>();
+        final ArrayDeque<RoutingNode> sourceNodes = new ArrayDeque<>();
+        final ArrayDeque<RoutingNode> targetNodes = new ArrayDeque<>();
         for (RoutingNode node : remoteRoutingNodes) {
             if (nodePrimaryShardCount.get(node.nodeId()) > avgPrimaryPerNode) {
                 sourceNodes.add(node);
diff --git a/server/src/test/java/org/opensearch/cluster/routing/allocation/RemoteShardsBalancerBaseTestCase.java b/server/src/test/java/org/opensearch/cluster/routing/allocation/RemoteShardsBalancerBaseTestCase.java
index 6a03a1f79bcde..a7f18aabf8436 100644
--- a/server/src/test/java/org/opensearch/cluster/routing/allocation/RemoteShardsBalancerBaseTestCase.java
+++ b/server/src/test/java/org/opensearch/cluster/routing/allocation/RemoteShardsBalancerBaseTestCase.java
@@ -194,7 +194,7 @@ public AllocationService createRemoteCapableAllocationService() {
     }
 
     public AllocationService createRemoteCapableAllocationService(String excludeNodes) {
-        Settings settings = Settings.builder().put("cluster.routing.allocation.exclude.node_id", excludeNodes).build();
+        Settings settings = Settings.builder().put("cluster.routing.allocation.exclude._id", excludeNodes).build();
         return new MockAllocationService(
             randomAllocationDeciders(settings, EMPTY_CLUSTER_SETTINGS, random()),
             new TestGatewayAllocator(),
diff --git a/server/src/test/java/org/opensearch/cluster/routing/allocation/RemoteShardsRebalanceShardsTests.java b/server/src/test/java/org/opensearch/cluster/routing/allocation/RemoteShardsRebalanceShardsTests.java
index e1c0a7eff1f6e..e55a9de160114 100644
--- a/server/src/test/java/org/opensearch/cluster/routing/allocation/RemoteShardsRebalanceShardsTests.java
+++ b/server/src/test/java/org/opensearch/cluster/routing/allocation/RemoteShardsRebalanceShardsTests.java
@@ -25,25 +25,51 @@ public class RemoteShardsRebalanceShardsTests extends RemoteShardsBalancerBaseTe
      * Post rebalance primaries should be balanced across all the nodes.
      */
     public void testShardAllocationAndRebalance() {
-        int localOnlyNodes = 20;
-        int remoteCapableNodes = 40;
-        int localIndices = 40;
-        int remoteIndices = 80;
+        final int localOnlyNodes = 20;
+        final int remoteCapableNodes = 40;
+        final int halfRemoteCapableNodes = remoteCapableNodes / 2;
+        final int localIndices = 40;
+        final int remoteIndices = 80;
         ClusterState clusterState = createInitialCluster(localOnlyNodes, remoteCapableNodes, localIndices, remoteIndices);
-        AllocationService service = this.createRemoteCapableAllocationService();
+        final StringBuilder excludeNodes = new StringBuilder();
+        for (int i = 0; i < halfRemoteCapableNodes; i++) {
+            excludeNodes.append(getNodeId(i, true));
+            if (i != (remoteCapableNodes / 2 - 1)) {
+                excludeNodes.append(", ");
+            }
+        }
+        AllocationService service = this.createRemoteCapableAllocationService(excludeNodes.toString());
         clusterState = allocateShardsAndBalance(clusterState, service);
         RoutingNodes routingNodes = clusterState.getRoutingNodes();
         RoutingAllocation allocation = getRoutingAllocation(clusterState, routingNodes);
 
-        final Map<String, Integer> nodePrimariesCounter = getShardCounterPerNodeForRemoteCapablePool(clusterState, allocation, true);
-        final Map<String, Integer> nodeReplicaCounter = getShardCounterPerNodeForRemoteCapablePool(clusterState, allocation, false);
+        Map<String, Integer> nodePrimariesCounter = getShardCounterPerNodeForRemoteCapablePool(clusterState, allocation, true);
+        Map<String, Integer> nodeReplicaCounter = getShardCounterPerNodeForRemoteCapablePool(clusterState, allocation, false);
         int avgPrimariesPerNode = getTotalShardCountAcrossNodes(nodePrimariesCounter) / remoteCapableNodes;
 
-        // Primary and replica are balanced post first reroute
+        // Primary and replica are balanced after first allocating unassigned
+        for (RoutingNode node : routingNodes) {
+            if (RoutingPool.REMOTE_CAPABLE.equals(RoutingPool.getNodePool(node))) {
+                if (Integer.parseInt(node.nodeId().split("-")[4]) < halfRemoteCapableNodes) {
+                    assertEquals(0, (int) nodePrimariesCounter.getOrDefault(node.nodeId(), 0));
+                } else {
+                    assertEquals(avgPrimariesPerNode * 2, (int) nodePrimariesCounter.get(node.nodeId()));
+                }
+                assertTrue(nodeReplicaCounter.getOrDefault(node.nodeId(), 0) >= 0);
+            }
+        }
+
+        // Remove exclude constraint and rebalance
+        service = this.createRemoteCapableAllocationService();
+        clusterState = allocateShardsAndBalance(clusterState, service);
+        routingNodes = clusterState.getRoutingNodes();
+        allocation = getRoutingAllocation(clusterState, routingNodes);
+        nodePrimariesCounter = getShardCounterPerNodeForRemoteCapablePool(clusterState, allocation, true);
+        nodeReplicaCounter = getShardCounterPerNodeForRemoteCapablePool(clusterState, allocation, false);
         for (RoutingNode node : routingNodes) {
             if (RoutingPool.REMOTE_CAPABLE.equals(RoutingPool.getNodePool(node))) {
-                assertInRange(nodePrimariesCounter.get(node.nodeId()), avgPrimariesPerNode, remoteCapableNodes - 1);
-                assertTrue(nodeReplicaCounter.get(node.nodeId()) >= 0);
+                assertEquals(avgPrimariesPerNode, (int) nodePrimariesCounter.get(node.nodeId()));
+                assertTrue(nodeReplicaCounter.getOrDefault(node.nodeId(), 0) >= 0);
             }
         }
     }