This issue is caused due to AWS RDS permissions. While restoring, when we select restore from a file, Microsoft SSMS searches at the physical location where the database is running. But AWS RDS is designed in such a way that we don't get file-level access to the RDS instance. Instead, we get endpoint and port to connect it.

You can find more at the following link: http://docs.aws.amazon.com/AmazonRDS/latest/UserGuide/SQLServer.Procedural.Importing.html

This issue is caused due to AWS RDS permissions. 

While restoring, when we select restore from a file, Microsoft SSMS searches at the physical location where the database is running. But AWS RDS is designed in such a way that we don't get file-level access to the RDS instance. Instead, we get an endpoint and port to connect it.

See Importing and Exporting SQL Server Databases in the Amazon Relational Database Service (RDS) User Guide for more details.