diff --git a/loki/transform/transform_inline.py b/loki/transform/transform_inline.py
index edf59e2e1..62974cf18 100644
--- a/loki/transform/transform_inline.py
+++ b/loki/transform/transform_inline.py
@@ -24,8 +24,10 @@
 from loki.logging import warning, error
 from loki.pragma_utils import pragmas_attached, is_loki_pragma
 
-from loki.transform.transform_utilities import single_variable_declaration
-
+from loki.transform.transform_utilities import (
+    single_variable_declaration,
+    recursive_expression_map_update
+)
 
 __all__ = [
     'inline_constant_parameters', 'inline_elemental_functions',
@@ -208,9 +210,6 @@ def map_call_to_procedure_body(call, caller):
          Procedure (scope) into which the callee's body gets mapped
     """
 
-    # pylint: disable=import-outside-toplevel,cyclic-import
-    from loki.transform import recursive_expression_map_update
-
     def _map_unbound_dims(var, val):
         """
         Maps all unbound dimension ranges in the passed array value
@@ -339,6 +338,7 @@ def inline_subroutine_calls(routine, calls, callee, allowed_aliases=None):
     for v in FindVariables(unique=False).visit(callee.body):
         if v.name.lower() in duplicate_names:
             var_map[v] = v.clone(name=f'{callee.name}_{v.name}')
+    var_map = recursive_expression_map_update(var_map)
     callee.body = SubstituteExpressions(var_map).visit(callee.body)
 
     # Separate allowed aliases from other variables to ensure clean hoisting
diff --git a/tests/test_transform_inline.py b/tests/test_transform_inline.py
index ec70d1113..c7430b04d 100644
--- a/tests/test_transform_inline.py
+++ b/tests/test_transform_inline.py
@@ -569,6 +569,41 @@ def test_inline_internal_routines_aliasing_declaration(frontend):
     assert assigns[3].lhs == 'jg' and assigns[3].rhs == '2'
     assert assigns[4].lhs == 'z' and assigns[4].rhs == 'jlon + jg'
 
+@pytest.mark.parametrize('frontend', available_frontends())
+def test_inline_member_routines_indexing_of_shadowed_array(frontend):
+    """
+    Test special case of inlining of member subroutines when inlined routine contains
+    shadowed array and array indices. 
+    In particular, this test checks that also the variables indexing
+    the array in the inlined result get renamed correctly.
+    """
+    fcode = """
+    subroutine outer(klon)
+        integer :: jg, jlon
+        integer :: arr(3, 3)
+
+        jg = 70000
+        call inner2()
+
+        contains
+
+        subroutine inner2()
+            integer :: jlon, jg 
+            integer :: arr(3, 3)
+            do jg=1,3
+                do jlon=1,3
+                   arr(jlon, jg) = 11 
+                end do
+            end do
+        end subroutine inner2
+
+    end subroutine outer
+    """
+    routine = Subroutine.from_source(fcode, frontend=frontend)
+    inline_member_procedures(routine)
+    innerloop = FindNodes(Loop).visit(routine.body)[1]
+    innerloopvars = FindVariables().visit(innerloop)
+    assert 'inner2_arr(inner2_jlon,inner2_jg)' in innerloopvars
 
 @pytest.mark.parametrize('frontend', available_frontends())
 def test_inline_member_routines_sequence_assoc(frontend):