diff --git a/src/libs/ComposerUtils/index.ts b/src/libs/ComposerUtils/index.ts
index 32ebca9afee8..94bba5d0d00c 100644
--- a/src/libs/ComposerUtils/index.ts
+++ b/src/libs/ComposerUtils/index.ts
@@ -14,6 +14,14 @@ function insertText(text: string, selection: Selection, textToInsert: string): s
     return text.slice(0, selection.start) + textToInsert + text.slice(selection.end, text.length);
 }
 
+/**
+ * Insert a white space at given index of text
+ * @param text - text that needs whitespace to be appended to
+ */
+function insertWhiteSpaceAtIndex(text: string, index: number) {
+    return `${text.slice(0, index)} ${text.slice(index)}`;
+}
+
 /**
  * Check whether we can skip trigger hotkeys on some specific devices.
  */
@@ -23,4 +31,22 @@ function canSkipTriggerHotkeys(isSmallScreenWidth: boolean, isKeyboardShown: boo
     return (isSmallScreenWidth && DeviceCapabilities.canUseTouchScreen()) || isKeyboardShown;
 }
 
-export {getNumberOfLines, updateNumberOfLines, insertText, canSkipTriggerHotkeys};
+/**
+ * Finds the length of common suffix between two texts
+ */
+function findCommonSuffixLength(str1: string, str2: string, cursorPosition: number) {
+    let commonSuffixLength = 0;
+    const minLength = Math.min(str1.length - cursorPosition, str2.length);
+
+    for (let i = 1; i <= minLength; i++) {
+        if (str1.charAt(str1.length - i) === str2.charAt(str2.length - i)) {
+            commonSuffixLength++;
+        } else {
+            break;
+        }
+    }
+
+    return commonSuffixLength;
+}
+
+export {getNumberOfLines, updateNumberOfLines, insertText, canSkipTriggerHotkeys, insertWhiteSpaceAtIndex, findCommonSuffixLength};
diff --git a/src/pages/home/report/ReportActionCompose/ComposerWithSuggestions/ComposerWithSuggestions.js b/src/pages/home/report/ReportActionCompose/ComposerWithSuggestions/ComposerWithSuggestions.js
index a98a717e13d0..90c2ba0b42cf 100644
--- a/src/pages/home/report/ReportActionCompose/ComposerWithSuggestions/ComposerWithSuggestions.js
+++ b/src/pages/home/report/ReportActionCompose/ComposerWithSuggestions/ComposerWithSuggestions.js
@@ -122,6 +122,7 @@ function ComposerWithSuggestions({
         return draft;
     });
     const commentRef = useRef(value);
+    const lastTextRef = useRef(value);
 
     const {isSmallScreenWidth} = useWindowDimensions();
     const maxComposerLines = isSmallScreenWidth ? CONST.COMPOSER.MAX_LINES_SMALL_SCREEN : CONST.COMPOSER.MAX_LINES;
@@ -189,6 +190,47 @@ function ComposerWithSuggestions({
         [],
     );
 
+    /**
+     * Find the newly added characters between the previous text and the new text based on the selection.
+     *
+     * @param {string} prevText - The previous text.
+     * @param {string} newText - The new text.
+     * @returns {object} An object containing information about the newly added characters.
+     * @property {number} startIndex - The start index of the newly added characters in the new text.
+     * @property {number} endIndex - The end index of the newly added characters in the new text.
+     * @property {string} diff - The newly added characters.
+     */
+    const findNewlyAddedChars = useCallback(
+        (prevText, newText) => {
+            let startIndex = -1;
+            let endIndex = -1;
+            let currentIndex = 0;
+
+            // Find the first character mismatch with newText
+            while (currentIndex < newText.length && prevText.charAt(currentIndex) === newText.charAt(currentIndex) && selection.start > currentIndex) {
+                currentIndex++;
+            }
+
+            if (currentIndex < newText.length) {
+                startIndex = currentIndex;
+                const commonSuffixLength = ComposerUtils.findCommonSuffixLength(prevText, newText, selection.end);
+                // if text is getting pasted over find length of common suffix and subtract it from new text length
+                if (commonSuffixLength > 0 || selection.end - selection.start > 0) {
+                    endIndex = newText.length - commonSuffixLength;
+                } else {
+                    endIndex = currentIndex + newText.length;
+                }
+            }
+
+            return {
+                startIndex,
+                endIndex,
+                diff: newText.substring(startIndex, endIndex),
+            };
+        },
+        [selection.start, selection.end],
+    );
+
     /**
      * Update the value of the comment in Onyx
      *
@@ -198,7 +240,13 @@ function ComposerWithSuggestions({
     const updateComment = useCallback(
         (commentValue, shouldDebounceSaveComment) => {
             raiseIsScrollLikelyLayoutTriggered();
-            const {text: newComment, emojis, cursorPosition} = EmojiUtils.replaceAndExtractEmojis(commentValue, preferredSkinTone, preferredLocale);
+            const {startIndex, endIndex, diff} = findNewlyAddedChars(lastTextRef.current, commentValue);
+            const isEmojiInserted = diff.length && endIndex > startIndex && diff.trim() === diff && EmojiUtils.containsOnlyEmojis(diff);
+            const {
+                text: newComment,
+                emojis,
+                cursorPosition,
+            } = EmojiUtils.replaceAndExtractEmojis(isEmojiInserted ? ComposerUtils.insertWhiteSpaceAtIndex(commentValue, endIndex) : commentValue, preferredSkinTone, preferredLocale);
             if (!_.isEmpty(emojis)) {
                 const newEmojis = EmojiUtils.getAddedEmojis(emojis, emojisPresentBefore.current);
                 if (!_.isEmpty(newEmojis)) {
@@ -255,6 +303,7 @@ function ComposerWithSuggestions({
         },
         [
             debouncedUpdateFrequentlyUsedEmojis,
+            findNewlyAddedChars,
             preferredLocale,
             preferredSkinTone,
             reportID,
@@ -309,17 +358,10 @@ function ComposerWithSuggestions({
     /**
      * Callback to add whatever text is chosen into the main input (used f.e as callback for the emoji picker)
      * @param {String} text
-     * @param {Boolean} shouldAddTrailSpace
      */
     const replaceSelectionWithText = useCallback(
-        (text, shouldAddTrailSpace = true) => {
-            const updatedText = shouldAddTrailSpace ? `${text} ` : text;
-            const selectionSpaceLength = shouldAddTrailSpace ? CONST.SPACE_LENGTH : 0;
-            updateComment(ComposerUtils.insertText(commentRef.current, selection, updatedText));
-            setSelection((prevSelection) => ({
-                start: prevSelection.start + text.length + selectionSpaceLength,
-                end: prevSelection.start + text.length + selectionSpaceLength,
-            }));
+        (text) => {
+            updateComment(ComposerUtils.insertText(commentRef.current, selection, text));
         },
         [selection, updateComment],
     );
@@ -524,6 +566,10 @@ function ComposerWithSuggestions({
         [blur, focus, prepareCommentAndResetComposer, replaceSelectionWithText],
     );
 
+    useEffect(() => {
+        lastTextRef.current = value;
+    }, [value]);
+
     useEffect(() => {
         onValueChange(value);
     }, [onValueChange, value]);