Azure indirect Peering

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Let's say I have peering set up as follows: A<->B<->C and want to route traffic between vnet A and C

Is this currently possible? Perhaps a vnet gateway in B & the usage of UDR's?

Thanks

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For now, it is not possible.

VNet peering is between two virtual networks, and there is no derived transitive relationship. If virtual network A is peered with virtual network B, and if virtual network B is peered with virtual network C, it does not translate to virtual network A being peered with virtual network C. UDR could not achieve your scenario.

Why not set up as follows: A <->B B<->C A<->C?

More information about Peering please refer to this article.