diff --git a/cns/fsnotify/fsnotify.go b/cns/fsnotify/fsnotify.go
index 5f1beaf1b17..c7d8287b610 100644
--- a/cns/fsnotify/fsnotify.go
+++ b/cns/fsnotify/fsnotify.go
@@ -3,6 +3,7 @@ package fsnotify
 import (
 	"context"
 	"io"
+	"io/fs"
 	"os"
 	"sync"
 	"time"
@@ -27,17 +28,18 @@ type watcher struct {
 }
 
 // Create the AsyncDelete watcher.
-func New(cli releaseIPsClient, path string, logger *zap.Logger) *watcher { //nolint
+func New(cli releaseIPsClient, path string, logger *zap.Logger) (*watcher, error) { //nolint
 	// Add directory where intended deletes are kept
-	if err := os.Mkdir(path, 0o755); err != nil { //nolint
+	if err := os.Mkdir(path, 0o755); err != nil && !errors.Is(err, fs.ErrExist) { //nolint
 		logger.Error("error making directory", zap.String("path", path), zap.Error(err))
+		return nil, errors.Wrapf(err, "failed to create dir %s", path)
 	}
 	return &watcher{
 		cli:           cli,
 		path:          path,
 		log:           logger,
 		pendingDelete: make(map[string]struct{}),
-	}
+	}, nil
 }
 
 // releaseAll locks and iterates the pendingDeletes map and calls CNS to
@@ -164,8 +166,12 @@ func (w *watcher) readFS() error {
 // WatchFS starts the filesystem watcher to handle async Pod deletes.
 // Blocks until the context is closed; returns underlying fsnotify errors
 // if something goes fatally wrong.
-func (w *watcher) Start(ctx context.Context) error {
+func (w *watcher) Start(c context.Context) error {
+	ctx, cancel := context.WithCancel(c)
+	defer cancel()
+
 	errs := make(chan error)
+
 	// Start watching for enqueued missed deletes so that we process them as soon as they arrive.
 	go func(errs chan<- error) {
 		errs <- w.watchPendingDelete(ctx)
@@ -182,8 +188,12 @@ func (w *watcher) Start(ctx context.Context) error {
 	}
 
 	// block until one of the goroutines returns an error
-	err := <-errs
-	return err
+	select {
+	case <-ctx.Done():
+		return errors.Wrap(ctx.Err(), "exiting Start")
+	case err := <-errs:
+		return err
+	}
 }
 
 // AddFile creates new file using the containerID as name
diff --git a/cns/service/main.go b/cns/service/main.go
index 3304541540e..da013ab23e6 100644
--- a/cns/service/main.go
+++ b/cns/service/main.go
@@ -57,7 +57,7 @@ import (
 	localtls "github.com/Azure/azure-container-networking/server/tls"
 	"github.com/Azure/azure-container-networking/store"
 	"github.com/Azure/azure-container-networking/telemetry"
-	"github.com/avast/retry-go/v3"
+	"github.com/avast/retry-go/v4"
 	"github.com/pkg/errors"
 	"go.uber.org/zap"
 	corev1 "k8s.io/api/core/v1"
@@ -826,15 +826,19 @@ func main() {
 			z.Error("failed to create cnsclient", zap.Error(err))
 		}
 		go func() {
-			for {
+			_ = retry.Do(func() error {
 				z.Info("starting fsnotify watcher to process missed Pod deletes")
-				w := fsnotify.New(cnsclient, cnsconfig.AsyncPodDeletePath, z)
+				w, err := fsnotify.New(cnsclient, cnsconfig.AsyncPodDeletePath, z)
+				if err != nil {
+					z.Error("failed to create fsnotify watcher", zap.Error(err))
+					return errors.Wrap(err, "failed to create fsnotify watcher, will retry")
+				}
 				if err := w.Start(rootCtx); err != nil {
 					z.Error("failed to start fsnotify watcher, will retry", zap.Error(err))
-					time.Sleep(time.Minute)
-					continue
+					return errors.Wrap(err, "failed to start fsnotify watcher, will retry")
 				}
-			}
+				return nil
+			}, retry.DelayType(retry.BackOffDelay), retry.Attempts(0), retry.Context(rootCtx))
 		}()
 	}