use project relative preference for declaration emit

Fixes #39117

Author: sheetalkamat

src/compiler/checker.ts

@@ -5679,7 +5679,7 @@ namespace ts {
                         specifierCompilerOptions,
                         contextFile,
                         moduleResolverHost,
-                        { importModuleSpecifierPreference: isBundle ? "non-relative" : "relative", importModuleSpecifierEnding: isBundle ? "minimal" : undefined },
+                        { importModuleSpecifierPreference: isBundle ? "non-relative" : "project-relative", importModuleSpecifierEnding: isBundle ? "minimal" : undefined },
                     ));
                     links.specifierCache ??= new Map();
                     links.specifierCache.set(contextFile.path, specifier);

src/compiler/moduleSpecifiers.ts

@@ -206,7 +206,9 @@ namespace ts.moduleSpecifiers {
         }
 
         if (relativePreference === RelativePreference.ExternalNonRelative) {
-            const projectDirectory = host.getCurrentDirectory();
+            const projectDirectory = compilerOptions.configFilePath ?
+                toPath(getDirectoryPath(compilerOptions.configFilePath), host.getCurrentDirectory(), info.getCanonicalFileName) :
+                info.getCanonicalFileName(host.getCurrentDirectory());
             const modulePath = toPath(moduleFileName, projectDirectory, getCanonicalFileName);
             const sourceIsInternal = startsWith(sourceDirectory, projectDirectory);
             const targetIsInternal = startsWith(modulePath, projectDirectory);