diff --git a/go.mod b/go.mod
index f996fe1f..b294861d 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 v1.17.0
+	github.com/projectsveltos/libsveltos v1.17.1-0.20261101135809-65798348bae6
 	github.com/prometheus/client_golang v1.25.0
 	github.com/sigstore/cosign/v3 v3.1.4
 	github.com/sigstore/sigstore v1.11.2
diff --git a/go.sum b/go.sum
index eab8692d..77f3acf6 100644
--- a/go.sum
+++ b/go.sum
@@ -645,8 +645,8 @@ 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 v1.17.0 h1:7oIvY+bg9oLRYm8wlyZypYVvCcMspYl/FT9VG8XvQG0=
-github.com/projectsveltos/libsveltos v1.17.0/go.mod h1:dHJrl1V5/WrNda5wzxbHs2dlsvoV/FUlwK1TXy2X3pA=
+github.com/projectsveltos/libsveltos v1.17.1-0.20261101135809-65798348bae6 h1:lwfrK/ZH9Ee2YAcEdbS0T18QMp/ea7BvEt967oKQnu4=
+github.com/projectsveltos/libsveltos v1.17.1-0.20261101135809-65798348bae6/go.mod h1:dHJrl1V5/WrNda5wzxbHs2dlsvoV/FUlwK1TXy2X3pA=
 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=
diff --git a/pkg/app/app.go b/pkg/app/app.go
index 4a55c474..854ff25b 100644
--- a/pkg/app/app.go
+++ b/pkg/app/app.go
@@ -67,6 +67,7 @@ import (
 	"github.com/projectsveltos/addon-controller/controllers/dependencymanager"
 	"github.com/projectsveltos/addon-controller/internal/telemetry"
 	libsveltosv1beta1 "github.com/projectsveltos/libsveltos/api/v1beta1"
+	"github.com/projectsveltos/libsveltos/lib/clusterproxy"
 	"github.com/projectsveltos/libsveltos/lib/crd"
 	"github.com/projectsveltos/libsveltos/lib/deployer"
 	logs "github.com/projectsveltos/libsveltos/lib/logsettings"
@@ -86,6 +87,8 @@ var (
 	tmpReportMode                int
 	restConfigQPS                float32
 	restConfigBurst              int
+	managedClusterQPS            float32
+	managedClusterBurst          int
 	webhookPort                  int
 	syncPeriod                   time.Duration
 	conflictRetryTime            time.Duration
@@ -137,6 +140,7 @@ func Run() {
 	ctrlOptions := getCtrlOptions(scheme)
 
 	restConfig := getRestConfig()
+	clusterproxy.SetRestConfigLimits(managedClusterQPS, managedClusterBurst)
 
 	ctx := ctrl.SetupSignalHandler()
 
@@ -282,15 +286,25 @@ func initFlags(fs *pflag.FlagSet) {
 	fs.StringVar(&registry, "registry", "",
 		"Container registry for drift-detection images. Defaults to docker.io/ if empty.")
 
-	const defautlRestConfigQPS = 20
+	const defautlRestConfigQPS = 40
 	fs.Float32Var(&restConfigQPS, "kube-api-qps", defautlRestConfigQPS,
-		fmt.Sprintf("Maximum queries per second from the controller client to the Kubernetes API server. Defaults to %d",
-			defautlRestConfigQPS))
+		fmt.Sprintf("Maximum queries per second from the controller client to the management cluster Kubernetes API server. "+
+			"Defaults to %d", defautlRestConfigQPS))
 
-	const defaultRestConfigBurst = 60
+	const defaultRestConfigBurst = 120
 	fs.IntVar(&restConfigBurst, "kube-api-burst", defaultRestConfigBurst,
-		fmt.Sprintf("Maximum number of queries that should be allowed in one burst from the controller client to the Kubernetes API server. Default %d",
-			defaultRestConfigBurst))
+		fmt.Sprintf("Maximum number of queries that should be allowed in one burst from the controller client to the "+
+			"management cluster Kubernetes API server. Default %d", defaultRestConfigBurst))
+
+	const defaultManagedClusterRestConfigQPS = 20
+	fs.Float32Var(&managedClusterQPS, "managed-cluster-kube-api-qps", defaultManagedClusterRestConfigQPS,
+		fmt.Sprintf("Maximum queries per second from the controller client to the Kubernetes API server of each managed cluster. "+
+			"Defaults to %d", defaultManagedClusterRestConfigQPS))
+
+	const defaultManagedClusterRestConfigBurst = 60
+	fs.IntVar(&managedClusterBurst, "managed-cluster-kube-api-burst", defaultManagedClusterRestConfigBurst,
+		fmt.Sprintf("Maximum number of queries that should be allowed in one burst from the controller client to the "+
+			"Kubernetes API server of each managed cluster. Default %d", defaultManagedClusterRestConfigBurst))
 
 	const defaultWebhookPort = 9443
 	fs.IntVar(&webhookPort, "webhook-port", defaultWebhookPort,