Import one schema into another new schema - Oracle

The issue was with the dmp file itself. I had to re-export the file and the command works fine. Thank you @Justin Cave

After you correct the possible dmp file problem, this is a way to ensure that the schema is remapped and imported appropriately. This will also ensure that the tablespace will change also, if needed:

impdp system/<password> SCHEMAS=user1 remap_schema=user1:user2 \
            remap_tablespace=user1:user2 directory=EXPORTDIR \
            dumpfile=user1.dmp logfile=E:\Data\user1.log

EXPORTDIR must be defined in oracle as a directory as the system user

create or replace directory EXPORTDIR as 'E:\Data';
grant read, write on directory EXPORTDIR to user2;