diff --git a/include/tvm/ffi/c_api.h b/include/tvm/ffi/c_api.h
index a5a581ae..4da0d4d0 100644
--- a/include/tvm/ffi/c_api.h
+++ b/include/tvm/ffi/c_api.h
@@ -62,7 +62,7 @@
 /*! \brief TVM FFI minor version. */
 #define TVM_FFI_VERSION_MINOR 1
 /*! \brief TVM FFI patch version. */
-#define TVM_FFI_VERSION_PATCH 9
+#define TVM_FFI_VERSION_PATCH 8
 // NOLINTEND(modernize-macro-to-enum)
 
 #ifdef __cplusplus
diff --git a/python/tvm_ffi/cython/tvm_ffi_python_helpers.h b/python/tvm_ffi/cython/tvm_ffi_python_helpers.h
index 93d6540a..666bb6e9 100644
--- a/python/tvm_ffi/cython/tvm_ffi_python_helpers.h
+++ b/python/tvm_ffi/cython/tvm_ffi_python_helpers.h
@@ -321,10 +321,16 @@ class TVMFFIPyCallManager {
           return -1;
         }
       }
+
       if (ctx.dlpack_c_exchange_api != nullptr &&
           prev_tensor_allocator != ctx.dlpack_c_exchange_api->managed_tensor_allocator) {
-        c_api_ret_code[0] =
-            TVMFFIEnvSetDLPackManagedTensorAllocator(prev_tensor_allocator, 0, nullptr);
+        // note: we cannot set the error value to c_api_ret_code[0] here because it
+        // will be overwritten by the error value from the function call
+        if (TVMFFIEnvSetDLPackManagedTensorAllocator(prev_tensor_allocator, 0, nullptr) != 0) {
+          PyErr_SetString(PyExc_RuntimeError, "Failed to recover DLPack managed tensor allocator");
+          return -1;
+        }
+        // return error after
         if (c_api_ret_code[0] != 0) return 0;
       }
       if (optional_out_ctx_dlpack_api != nullptr && ctx.dlpack_c_exchange_api != nullptr) {
diff --git a/src/ffi/extra/env_context.cc b/src/ffi/extra/env_context.cc
index 9b2fb252..95045d41 100644
--- a/src/ffi/extra/env_context.cc
+++ b/src/ffi/extra/env_context.cc
@@ -66,7 +66,8 @@ class EnvContext {
                                        int write_to_global_context,
                                        DLPackManagedTensorAllocator* opt_out_original_allocator) {
     if (opt_out_original_allocator != nullptr) {
-      *opt_out_original_allocator = GetDLPackManagedTensorAllocator();
+      // only returns the cached local allocator and ignore global allocator
+      *opt_out_original_allocator = dlpack_allocator_;
     }
     if (write_to_global_context != 0) {
       GlobalTensorAllocator() = allocator;
diff --git a/tests/python/test_tensor.py b/tests/python/test_tensor.py
index d091d859..0c45654c 100644
--- a/tests/python/test_tensor.py
+++ b/tests/python/test_tensor.py
@@ -18,7 +18,7 @@
 from __future__ import annotations
 
 from types import ModuleType
-from typing import Any, NamedTuple
+from typing import Any, NamedTuple, NoReturn
 
 import numpy.typing as npt
 import pytest
@@ -78,6 +78,20 @@ def test_tensor_auto_dlpack() -> None:
     np.testing.assert_equal(y.numpy(), x.numpy())
 
 
+@pytest.mark.skipif(torch is None, reason="Fast torch dlpack importer is not enabled")
+def test_tensor_auto_dlpack_with_error() -> None:
+    assert torch is not None
+    x = torch.arange(128)
+
+    def raise_torch_error(x: Any) -> NoReturn:
+        raise ValueError("error XYZ")
+
+    f = tvm_ffi.convert(raise_torch_error)
+    with pytest.raises(ValueError):
+        # pass in torch argment to trigger the error in set allocator path
+        f(x)
+
+
 def test_tensor_class_override() -> None:
     class MyTensor(tvm_ffi.Tensor):
         pass