VPC Peering Connection across different region, ping not responding

I have an EC2 Instance in ap-south-1 and in eu-west-2 and I am trying to setup a Peering VPC connection to ping from one instance to the other.

Routing Table for eu-west-2 VPC

Routing Table for ap-south-1 VPC

Security Group in eu-west-2

Security Group in ap-south-1

I have verified the peering connection is Activated between the two VPCs/subnets. Both regions Network ACLs allow all traffic in and out, similarly the security groups allow all outbound traffic. However, I try and do a simple "ping" to the other instance, no packets are received.

Is there anything wrong with the setup? There is one thing I am unsure about... Is it possible to have an Internet Gateway and a Peering Connection on the same subnet?

Looking at the routing tables, the IP 172.31.40.90 will satisify the 172.31.32.0/20 CIDR block (for the peering connection), and the 0.0.0.0/0 CIDR block for the Internet Gateway... how does it know which route to take if the IP satisfies more than 1 route in the Routing Table?

Update The iptables config on the eu-west-2 was the offending issue.

I reset the iptables using the following commands

sudo iptables -P INPUT ACCEPT
sudo iptables -P OUTPUT ACCEPT
sudo iptables -P FORWARD ACCEPT
sudo iptables -F

The offending iptables -L config

Chain INPUT (policy ACCEPT)
target     prot opt source               destination
AS0_ACCEPT  all  --  anywhere             anywhere             state RELATED,ESTABLISHED
AS0_ACCEPT  all  --  anywhere             anywhere
AS0_IN_PRE  all  --  anywhere             anywhere             mark match 0x2000000/0x2000000
AS0_ACCEPT  tcp  --  anywhere             anywhere             state NEW tcp dpt:914
AS0_ACCEPT  tcp  --  anywhere             anywhere             state NEW tcp dpt:915
AS0_ACCEPT  udp  --  anywhere             anywhere             state NEW udp dpt:916
AS0_ACCEPT  udp  --  anywhere             anywhere             state NEW udp dpt:917
AS0_WEBACCEPT  all  --  anywhere             anywhere             state RELATED,ESTABLISHED
AS0_WEBACCEPT  tcp  --  anywhere             anywhere             state NEW tcp dpt:943
AS0_APIACCEPT  all  --  anywhere             anywhere             state RELATED,ESTABLISHED
AS0_APIACCEPT  tcp  --  anywhere             anywhere             state NEW tcp dpt:945

Chain FORWARD (policy ACCEPT)
target     prot opt source               destination
AS0_ACCEPT  all  --  anywhere             anywhere             state RELATED,ESTABLISHED
AS0_IN_PRE  all  --  anywhere             anywhere             mark match 0x2000000/0x2000000
AS0_OUT_S2C  all  --  anywhere             anywhere

Chain OUTPUT (policy ACCEPT)
target     prot opt source               destination
AS0_OUT_LOCAL  all  --  anywhere             anywhere

Chain AS0_ACCEPT (7 references)
target     prot opt source               destination
ACCEPT     all  --  anywhere             anywhere

Chain AS0_APIACCEPT (2 references)
target     prot opt source               destination
ACCEPT     all  --  anywhere             anywhere

Chain AS0_DNS (2 references)
target     prot opt source               destination
ACCEPT     all  --  anywhere             ip-172-31-0-2.eu-west-2.compute.internal
RETURN     all  --  anywhere             anywhere

Chain AS0_IN (4 references)
target     prot opt source               destination
ACCEPT     all  --  anywhere             ip-10-0-0-1.eu-west-2.compute.internal
AS0_IN_POST  all  --  anywhere             anywhere

Chain AS0_IN_NAT (0 references)
target     prot opt source               destination
MARK       all  --  anywhere             anywhere             MARK or 0x8000000
ACCEPT     all  --  anywhere             anywhere

Chain AS0_IN_POST (1 references)
target     prot opt source               destination
ACCEPT     all  --  anywhere             ip-172-31-32-0.eu-west-2.compute.internal/20
AS0_OUT    all  --  anywhere             anywhere
DROP       all  --  anywhere             anywhere

Chain AS0_IN_PRE (2 references)
target     prot opt source               destination
AS0_DNS    tcp  --  anywhere             anywhere             state NEW tcp dpt:domain
AS0_DNS    udp  --  anywhere             anywhere             state NEW udp dpt:domain
AS0_IN     all  --  anywhere             169.254.0.0/16
AS0_IN     all  --  anywhere             ip-192-168-0-0.eu-west-2.compute.internal/16
AS0_IN     all  --  anywhere             ip-172-16-0-0.eu-west-2.compute.internal/12
AS0_IN     all  --  anywhere             ip-10-0-0-0.eu-west-2.compute.internal/8
ACCEPT     all  --  anywhere             anywhere

Chain AS0_IN_ROUTE (0 references)
target     prot opt source               destination
MARK       all  --  anywhere             anywhere             MARK or 0x4000000
ACCEPT     all  --  anywhere             anywhere

Chain AS0_OUT (2 references)
target     prot opt source               destination
AS0_OUT_POST  all  --  anywhere             anywhere

Chain AS0_OUT_LOCAL (1 references)
target     prot opt source               destination
DROP       icmp --  anywhere             anywhere             icmp redirect
ACCEPT     all  --  anywhere             anywhere

Chain AS0_OUT_POST (1 references)
target     prot opt source               destination
DROP       all  --  anywhere             anywhere

Chain AS0_OUT_S2C (1 references)
target     prot opt source               destination
AS0_OUT    all  --  anywhere             anywhere

Chain AS0_WEBACCEPT (2 references)
target     prot opt source               destination
ACCEPT     all  --  anywhere             anywhere