unable to access SQL Managed Instance

Question

There are 2 Virtual machines. For example VM 1 and VM2

VM 1 is within Vnet 1 under subscription 1
VM2 is within Vnet 2 under subscription 1

SQL Managed instance is deployed within Vnet 2

Vnet 1 and Vnet 2 are peered.

SQL managed instance can be accessible from VM2 but not from VM1

HOST is not pinged from both the VM1 nd VM2

But if we connect to host using SQl management studio we are able to access sql managed instance from VM2 but not from VM1

Got an Error message - 1006

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Cannot connect to euazurealiernetdb.ff33e8eb290b.database.windows.net.

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A network-related or instance-specific error occurred while establishing a connection to SQL Server. The server was not found or was not accessible. Verify that the instance name is correct and that SQL Server is configured to allow remote connections. (provider: TCP Provider, error: 0 - A connection attempt failed because the connected party did not properly respond after a period of time, or established connection failed because connected host has failed to respond.) (.Net SqlClient Data Provider)

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For help, click: https://learn.microsoft.com/sql/relational-databases/errors-events/mssqlserver-10060-database-engine-error

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Error Number: 10060
Severity: 20
State: 0

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Program Location:

at System.Data.SqlClient.SqlInternalConnectionTds..ctor(DbConnectionPoolIdentity identity, SqlConnectionString connectionOptions, SqlCredential credential, Object providerInfo, String newPassword, SecureString newSecurePassword, Boolean redirectedUserInstance, SqlConnectionString userConnectionOptions, SessionData reconnectSessionData, DbConnectionPool pool, String accessToken, Boolean applyTransientFaultHandling, SqlAuthenticationProviderManager sqlAuthProviderManager)
at System.Data.SqlClient.SqlConnectionFactory.CreateConnection(DbConnectionOptions options, DbConnectionPoolKey poolKey, Object poolGroupProviderInfo, DbConnectionPool pool, DbConnection owningConnection, DbConnectionOptions userOptions)
at System.Data.ProviderBase.DbConnectionFactory.CreateNonPooledConnection(DbConnection owningConnection, DbConnectionPoolGroup poolGroup, DbConnectionOptions userOptions)
at System.Data.ProviderBase.DbConnectionFactory.TryGetConnection(DbConnection owningConnection, TaskCompletionSource1 retry, DbConnectionOptions userOptions, DbConnectionInternal oldConnection, DbConnectionInternal& connection) at System.Data.ProviderBase.DbConnectionInternal.TryOpenConnectionInternal(DbConnection outerConnection, DbConnectionFactory connectionFactory, TaskCompletionSource1 retry, DbConnectionOptions userOptions)
at System.Data.ProviderBase.DbConnectionClosed.TryOpenConnection(DbConnection outerConnection, DbConnectionFactory connectionFactory, TaskCompletionSource1 retry, DbConnectionOptions userOptions) at System.Data.SqlClient.SqlConnection.TryOpenInner(TaskCompletionSource1 retry)
at System.Data.SqlClient.SqlConnection.TryOpen(TaskCompletionSource`1 retry)
at System.Data.SqlClient.SqlConnection.Open()
at Microsoft.SqlServer.Management.SqlStudio.Explorer.ObjectExplorerService.ValidateConnection(UIConnectionInfo ci, IServerType server)
at Microsoft.SqlServer.Management.UI.ConnectionDlg.Connector.ConnectionThreadUser()

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A connection attempt failed because the connected party did not properly respond after a period of time, or established connection failed because connected host has failed to respond

We tried many option like 1433 Port open. Its already done. Checked firewall as well

Please suggest best posible solution