diff --git a/bgpd/bgp_attr_evpn.c b/bgpd/bgp_attr_evpn.c
index 1df646c346..0e341a8c6b 100644
--- a/bgpd/bgp_attr_evpn.c
+++ b/bgpd/bgp_attr_evpn.c
@@ -315,3 +315,4 @@ extern bool is_zero_gw_ip(const union gw_addr *gw_ip, const afi_t afi)
 
 	return false;
 }
+
diff --git a/bgpd/bgp_evpn.c b/bgpd/bgp_evpn.c
index b29825afc5..ae365fa13e 100644
--- a/bgpd/bgp_evpn.c
+++ b/bgpd/bgp_evpn.c
@@ -3972,7 +3972,7 @@ static int process_type5_route(struct peer *peer, afi_t afi, safi_t safi,
 	mpls_label_t label; /* holds the VNI as in the packet */
 	int ret;
 	afi_t gw_afi;
-	bool is_valid_update = false;
+	bool is_valid_update = true;
 
 	/* Type-5 route should be 34 or 58 bytes:
 	 * RD (8), ESI (10), Eth Tag (4), IP len (1), IP (4 or 16),
@@ -4001,9 +4001,9 @@ static int process_type5_route(struct peer *peer, afi_t afi, safi_t safi,
 	/* Additional information outside of prefix - ESI and GW IP */
 	memset(&evpn, 0, sizeof(evpn));
 
-	/* Fetch ESI */
+	/* Fetch ESI overlay index */
 	if (attr)
-		memcpy(&attr->esi, pfx, sizeof(esi_t));
+		memcpy(&evpn.eth_s_id, pfx, sizeof(esi_t));
 	pfx += ESI_BYTES;
 
 	/* Fetch Ethernet Tag. */
@@ -4052,25 +4052,53 @@ static int process_type5_route(struct peer *peer, afi_t afi, safi_t safi,
 	 * field
 	 */
 
+	/*
+	 * An update containing a non-zero gateway IP and a non-zero ESI
+	 * at the same time is should be treated as withdraw
+	 */
+	if (bgp_evpn_is_esi_valid(&evpn.eth_s_id)
+	    && !is_zero_gw_ip(&evpn.gw_ip, gw_afi)) {
+		flog_err(EC_BGP_EVPN_ROUTE_INVALID,
+			 "%s - Rx EVPN Type-5 ESI and gateway-IP both non-zero.",
+			 peer->host);
+		is_valid_update = false;
+	} else if (bgp_evpn_is_esi_valid(&evpn.eth_s_id))
+		evpn.type = OVERLAY_INDEX_ESI;
+	else if (!is_zero_gw_ip(&evpn.gw_ip, gw_afi))
+		evpn.type = OVERLAY_INDEX_GATEWAY_IP;
 	if (attr) {
-		is_valid_update = true;
-		if (is_zero_mac(&attr->rmac) &&
-		    is_zero_gw_ip(&evpn.gw_ip, gw_afi))
+		if (is_zero_mac(&attr->rmac)
+		    && !bgp_evpn_is_esi_valid(&evpn.eth_s_id)
+		    && is_zero_gw_ip(&evpn.gw_ip, gw_afi) && label == 0) {
+			flog_err(EC_BGP_EVPN_ROUTE_INVALID,
+				 "%s - Rx EVPN Type-5 ESI, gateway-IP, RMAC and label all zero",
+				 peer->host);
 			is_valid_update = false;
+		}
 
 		if (is_mcast_mac(&attr->rmac) || is_bcast_mac(&attr->rmac))
 			is_valid_update = false;
 	}
 
 	/* Process the route. */
-	if (is_valid_update)
+	if (attr && is_valid_update)
 		ret = bgp_update(peer, (struct prefix *)&p, addpath_id, attr,
 				 afi, safi, ZEBRA_ROUTE_BGP, BGP_ROUTE_NORMAL,
 				 &prd, &label, 1, 0, &evpn);
-	else
+	else {
+		if (!is_valid_update) {
+			char attr_str[BUFSIZ] = {0};
+
+			bgp_dump_attr(attr, attr_str, BUFSIZ);
+			zlog_warn(
+				"Invalid update from peer %s vrf %u prefix %pFX attr %s - treat as withdraw",
+				peer->hostname, peer->bgp->vrf_id, &p,
+				attr_str);
+		}
 		ret = bgp_withdraw(peer, (struct prefix *)&p, addpath_id, attr,
 				   afi, safi, ZEBRA_ROUTE_BGP, BGP_ROUTE_NORMAL,
 				   &prd, &label, 1, &evpn);
+	}
 
 	return ret;
 }
diff --git a/bgpd/bgp_route.c b/bgpd/bgp_route.c
index 4ec8ac305a..794da3b9c1 100644
--- a/bgpd/bgp_route.c
+++ b/bgpd/bgp_route.c
@@ -3442,23 +3442,6 @@ struct bgp_path_info *info_make(int type, int sub_type, unsigned short instance,
 	return new;
 }
 
-static void overlay_index_update(struct attr *attr,
-				 union gw_addr *gw_ip)
-{
-	if (!attr)
-		return;
-	if (gw_ip == NULL) {
-		struct bgp_route_evpn eo;
-
-		memset(&eo, 0, sizeof(eo));
-		bgp_attr_set_evpn_overlay(attr, &eo);
-	} else {
-		struct bgp_route_evpn eo = {.gw_ip = *gw_ip};
-
-		bgp_attr_set_evpn_overlay(attr, &eo);
-	}
-}
-
 static bool overlay_index_equal(afi_t afi, struct bgp_path_info *path,
 				union gw_addr *gw_ip)
 {
@@ -3641,6 +3624,11 @@ int bgp_update(struct peer *peer, const struct prefix *p, uint32_t addpath_id,
 	if (has_valid_label)
 		assert(label != NULL);
 
+	/* Update overlay index of the attribute */
+	if (afi == AFI_L2VPN && evpn)
+		memcpy(&attr->evpn_overlay, evpn,
+		       sizeof(struct bgp_route_evpn));
+
 	/* When peer's soft reconfiguration enabled.  Record input packet in
 	   Adj-RIBs-In.  */
 	if (!soft_reconfig
@@ -3816,12 +3804,6 @@ int bgp_update(struct peer *peer, const struct prefix *p, uint32_t addpath_id,
 		goto filtered;
 	}
 
-	/* Update Overlay Index */
-	if (afi == AFI_L2VPN) {
-		overlay_index_update(&new_attr,
-				     evpn == NULL ? NULL : &evpn->gw_ip);
-	}
-
 	/* The flag BGP_NODE_FIB_INSTALL_PENDING is for the following
 	 * condition :
 	 * Suppress fib is enabled
@@ -3856,10 +3838,7 @@ int bgp_update(struct peer *peer, const struct prefix *p, uint32_t addpath_id,
 		    && (!has_valid_label
 			|| memcmp(&(bgp_path_info_extra_get(pi))->label, label,
 				  num_labels * sizeof(mpls_label_t))
-				   == 0)
-		    && (overlay_index_equal(
-			       afi, pi,
-			       evpn == NULL ? NULL : &evpn->gw_ip))) {
+				   == 0)) {
 			if (get_active_bdc_from_pi(pi, afi, safi)
 			    && peer->sort == BGP_PEER_EBGP
 			    && CHECK_FLAG(pi->flags, BGP_PATH_HISTORY)) {
@@ -3867,7 +3846,7 @@ int bgp_update(struct peer *peer, const struct prefix *p, uint32_t addpath_id,
 					bgp_debug_rdpfxpath2str(
 						afi, safi, prd, p, label,
 						num_labels, addpath_id ? 1 : 0,
-						addpath_id, NULL, pfx_buf,
+						addpath_id, evpn, pfx_buf,
 						sizeof(pfx_buf));
 					zlog_debug("%s rcvd %s", peer->host,
 						   pfx_buf);
@@ -3893,7 +3872,7 @@ int bgp_update(struct peer *peer, const struct prefix *p, uint32_t addpath_id,
 					bgp_debug_rdpfxpath2str(
 						afi, safi, prd, p, label,
 						num_labels, addpath_id ? 1 : 0,
-						addpath_id, NULL, pfx_buf,
+						addpath_id, evpn, pfx_buf,
 						sizeof(pfx_buf));
 					zlog_debug(
 						"%s rcvd %s...duplicate ignored",
@@ -3920,7 +3899,7 @@ int bgp_update(struct peer *peer, const struct prefix *p, uint32_t addpath_id,
 			if (bgp_debug_update(peer, p, NULL, 1)) {
 				bgp_debug_rdpfxpath2str(
 					afi, safi, prd, p, label, num_labels,
-					addpath_id ? 1 : 0, addpath_id, NULL,
+					addpath_id ? 1 : 0, addpath_id, evpn,
 					pfx_buf, sizeof(pfx_buf));
 				zlog_debug(
 					"%s rcvd %s, flapped quicker than processing",
@@ -3934,7 +3913,7 @@ int bgp_update(struct peer *peer, const struct prefix *p, uint32_t addpath_id,
 		if (bgp_debug_update(peer, p, NULL, 1)) {
 			bgp_debug_rdpfxpath2str(afi, safi, prd, p, label,
 						num_labels, addpath_id ? 1 : 0,
-						addpath_id, NULL, pfx_buf,
+						addpath_id, evpn, pfx_buf,
 						sizeof(pfx_buf));
 			zlog_debug("%s rcvd %s", peer->host, pfx_buf);
 		}
@@ -4207,7 +4186,7 @@ int bgp_update(struct peer *peer, const struct prefix *p, uint32_t addpath_id,
 		}
 
 		bgp_debug_rdpfxpath2str(afi, safi, prd, p, label, num_labels,
-					addpath_id ? 1 : 0, addpath_id, NULL,
+					addpath_id ? 1 : 0, addpath_id, evpn,
 					pfx_buf, sizeof(pfx_buf));
 		zlog_debug("%s rcvd %s", peer->host, pfx_buf);
 	}
@@ -4239,11 +4218,6 @@ int bgp_update(struct peer *peer, const struct prefix *p, uint32_t addpath_id,
 		}
 	}
 
-	/* Update Overlay Index */
-	if (afi == AFI_L2VPN) {
-		overlay_index_update(new->attr,
-				     evpn == NULL ? NULL : &evpn->gw_ip);
-	}
 	/* Nexthop reachability check. */
 	if (((afi == AFI_IP || afi == AFI_IP6)
 	    && (safi == SAFI_UNICAST || safi == SAFI_LABELED_UNICAST))
@@ -4353,7 +4327,7 @@ filtered:
 		}
 
 		bgp_debug_rdpfxpath2str(afi, safi, prd, p, label, num_labels,
-					addpath_id ? 1 : 0, addpath_id, NULL,
+					addpath_id ? 1 : 0, addpath_id, evpn,
 					pfx_buf, sizeof(pfx_buf));
 		zlog_debug("%s rcvd UPDATE about %s -- DENIED due to: %s",
 			   peer->host, pfx_buf, reason);