MPLS IP VPN is created but the routes do not appear in the vpn-instance routing table even though they can be seen in the bgp routing table.
Since the routes are not being installed in the vpn routing table no communication occurs in the VPN
Check the mpls configuration on the interface of the router through which the vpn routes are being exchanged.
Enable mpls and mpls ldp on the interface this should resolve the issue and the vpn routes would be populated in the vpn-instance routing table.
The reason for this is that though the BGP Peer relationship is OK. There is no MPLS enabled on the interface through which these routes are being exchanged.
A quick way to check which all interfaces are running mpls ldp is to issue the command:
display mpls ldp interface