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You mention "peering" - do you mean you've got a VPC Peering connection in place between those VPCs? If so then the routing rules need to route traffic for the other VPC via the peering connection. If on the other hand you're connecting over public internet, is your redshift cluster set to "Public"?
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Yes, VPC peering. I have updated the routing rules and also updates the security group for both the vpcs. It still doesnt seem to work. (being within Amazon, we are not allowed to open anything to the internet)
OK I'm a bit confused because you said in your question "I have updated the default routes in both the VPC to include the intenet gaetway". To route between peered VPCs you need routes defined to go via the peering connections. For example if VPC1 has a peering connection pcx-11111111 to VPC2 whose CIDR block is 10.0.0.0/20, then VPC1's route tables need a route with Destination=10.0.0.0/20, Target=pcx-11111111.
Yes, I have done just that. Would you be open to a live chat, where I can show you all the setups that I did.? I am flexible with any time since I wfh mostly.