When a VM is connected to certain newly created portgroup for a newly created VLAN on the physical switch, it loses all connectivity. The DVPG (distributed virtual portgroup) on the DVS is correctly configured with the right VLAN tag.
Additionally, packet captures performed on the physical uplink NIC on the ESXi host using the following CLI command reveal that the ARP requests from the VM to it's default gateway are being sent out to the physical switch successfully, but no responses are seen coming back from the physical switch:esxihost# pktcap-uw --uplink vmnicX --capture UplinkSndKernel,UplinkRcvKernel -o - | tcpdump-uw -enr - | grep "VM-mac-address"
VMware ESXi
This is a result of a misconfiguration in the upstream physical switch.
Contact the networking vendor to troubleshoot further in the physical switch.