diff --git a/controllers/export_test.go b/controllers/export_test.go
index b49214cb..599241fa 100644
--- a/controllers/export_test.go
+++ b/controllers/export_test.go
@@ -252,6 +252,7 @@ var (
 	CollectResourceSummariesFromCluster   = collectResourceSummariesFromCluster
 	CollectAndProcessAllResourceSummaries = collectAndProcessAllResourceSummaries
 	IsResourceSummaryInstalledCached      = isResourceSummaryInstalledCached
+	SkipCollecting                        = skipCollecting
 	ResetResourceSummaryInstalledCache    = func() {
 		resourceSummaryInstalledCacheMu.Lock()
 		resourceSummaryInstalledCache = make(map[corev1.ObjectReference]bool)
diff --git a/controllers/resourcesummary_collection_test.go b/controllers/resourcesummary_collection_test.go
index 159bad78..c0112ec8 100644
--- a/controllers/resourcesummary_collection_test.go
+++ b/controllers/resourcesummary_collection_test.go
@@ -594,6 +594,45 @@ var _ = Describe("ResourceSummary Collection", func() {
 			return currentSveltosRS.Status.HelmResourcesChanged
 		}, "2s", pollingInterval).Should(BeTrue())
 	})
+
+	It("skipCollecting skips a SveltosCluster whose connection is down, even when it is marked ready", func() {
+		logger := textlogger.NewLogger(textlogger.NewConfig())
+
+		sveltosCluster := &libsveltosv1beta1.SveltosCluster{
+			ObjectMeta: metav1.ObjectMeta{
+				Namespace: randomString(),
+				Name:      randomString(),
+			},
+			Status: libsveltosv1beta1.SveltosClusterStatus{
+				Ready:            true,
+				ConnectionStatus: libsveltosv1beta1.ConnectionDown,
+			},
+		}
+		c := fake.NewClientBuilder().WithScheme(scheme).WithObjects(sveltosCluster).Build()
+
+		clusterRef := &corev1.ObjectReference{
+			Namespace:  sveltosCluster.Namespace,
+			Name:       sveltosCluster.Name,
+			Kind:       libsveltosv1beta1.SveltosClusterKind,
+			APIVersion: libsveltosv1beta1.GroupVersion.String(),
+		}
+
+		skip, err := controllers.SkipCollecting(context.TODO(), c, clusterRef, logger)
+		Expect(err).To(BeNil())
+		Expect(skip).To(BeTrue())
+
+		// Once the connection is back, collection is not skipped anymore
+		currentSveltosCluster := &libsveltosv1beta1.SveltosCluster{}
+		Expect(c.Get(context.TODO(),
+			types.NamespacedName{Namespace: sveltosCluster.Namespace, Name: sveltosCluster.Name},
+			currentSveltosCluster)).To(Succeed())
+		currentSveltosCluster.Status.ConnectionStatus = libsveltosv1beta1.ConnectionHealthy
+		Expect(c.Update(context.TODO(), currentSveltosCluster)).To(Succeed())
+
+		skip, err = controllers.SkipCollecting(context.TODO(), c, clusterRef, logger)
+		Expect(err).To(BeNil())
+		Expect(skip).To(BeFalse())
+	})
 })
 
 // getResourceSummary returns a bare ResourceSummary. None of the tests in this file need it
diff --git a/go.mod b/go.mod
index f961ffa0..dd85b9a3 100644
--- a/go.mod
+++ b/go.mod
@@ -20,7 +20,7 @@ require (
 	github.com/onsi/gomega v1.44.0
 	github.com/opencontainers/image-spec v1.1.1
 	github.com/pkg/errors v0.9.1
-	github.com/projectsveltos/libsveltos v1.16.1-0.20261007133830-d623a1556939
+	github.com/projectsveltos/libsveltos v1.16.1-0.20261010130719-c6f30f77e62f
 	github.com/prometheus/client_golang v1.25.0
 	github.com/sigstore/cosign/v3 v3.1.3
 	github.com/sigstore/sigstore v1.11.0
diff --git a/go.sum b/go.sum
index 00d966cb..b6b78274 100644
--- a/go.sum
+++ b/go.sum
@@ -643,8 +643,8 @@ github.com/pmezard/go-difflib v1.0.1-0.20181226105442-5d4384ee4fb2 h1:Jamvg5psRI
 github.com/pmezard/go-difflib v1.0.1-0.20181226105442-5d4384ee4fb2/go.mod h1:iKH77koFhYxTK1pcRnkKkqfTogsbg7gZNVY4sRDYZ/4=
 github.com/poy/onpar v1.1.2 h1:QaNrNiZx0+Nar5dLgTVp5mXkyoVFIbepjyEoGSnhbAY=
 github.com/poy/onpar v1.1.2/go.mod h1:6X8FLNoxyr9kkmnlqpK6LSoiOtrO6MICtWwEuWkLjzg=
-github.com/projectsveltos/libsveltos v1.16.1-0.20261007133830-d623a1556939 h1:yQuZm4uT19ZkdCPSU3hkheRszZOCXBEY4TILNudAm58=
-github.com/projectsveltos/libsveltos v1.16.1-0.20261007133830-d623a1556939/go.mod h1:wup25BAf1SHuG6FsY8D+tnm1U3/3NiuzcKec/In/fB4=
+github.com/projectsveltos/libsveltos v1.16.1-0.20261010130719-c6f30f77e62f h1:4+dAshhv+rdzFIlo6q5+3/8mSmxwiqxN1gxl5czeeF8=
+github.com/projectsveltos/libsveltos v1.16.1-0.20261010130719-c6f30f77e62f/go.mod h1:wup25BAf1SHuG6FsY8D+tnm1U3/3NiuzcKec/In/fB4=
 github.com/projectsveltos/lua-utils/glua-json v0.0.0-20251212200258-2b3cdcb7c0f5 h1:khnc+994UszxZYu69J+R5FKiLA/Nk1JQj0EYAkwTWz0=
 github.com/projectsveltos/lua-utils/glua-json v0.0.0-20251212200258-2b3cdcb7c0f5/go.mod h1:yVL8KQFa9tmcxgwl9nwIMtKgtmIVC1zaFRSCfOwYvPY=
 github.com/projectsveltos/lua-utils/glua-runes v0.0.0-20251212200258-2b3cdcb7c0f5 h1:YbsebwRwTRhV8QacvEAdFqxcxHdeu7JTVtsBovbkgos=