Got it!!!
It was looking for package B in the SQL server (One dropdown option for a Package task) as its location.
(and not the file system)
So Putting them in the dts/packages folder was not necessary.
So I imported them to MSDB folder in the Stored packages option which I get on connecting to SSIS from Management studio. When importing, make sure you are using the Import from "File system" and then browse to the dtsx file and include it (package B in my case)
All works fine now.