In this scenario, the issue arises from overlapping IP address ranges between the Transit VPC and the User VPC. Here’s a detailed breakdown:

Understanding ERPs (Elastic Routing Prefixes):

The ERP for the Transit VPC is 10.1.1.0/25, which covers IP addresses from 10.1.1.0 to 10.1.1.127.

The ERP for the User VPC is 10.1.1.0/24, which covers IP addresses from 10.1.1.0 to 10.1.1.255.

IP Address Overlap:

Since 10.1.1.0/25 is a subset of 10.1.1.0/24, there is a significant overlap in the IP address ranges of these two ERPs.

This overlap can cause routing issues because the same IP address range is being used in both VPCs, leading to ambiguity in routing and communication.

Communication Issue:

When a VM in the User VPC tries to communicate with other resources, the network cannot accurately determine the correct route due to the overlapping IP address ranges.

This overlap prevents proper routing and results in the VM being unable to communicate with other resources as intended.

Resolution:

To resolve this issue, the ERPs must be in different CIDR ranges. This means the IP address ranges for the Transit VPC and the User VPC should not overlap.

For example, if the Transit VPC uses 10.1.1.0/25, the User VPC could use a different range such as 10.1.2.0/24 or any other range that does not overlap with 10.1.1.0/25.

By ensuring that the ERPs are in different CIDR ranges, the network can properly route traffic between the VPCs without any conflicts or ambiguities, thereby enabling the VM in the User VPC to communicate with other resources effectively.