I had sent an email to the German Consulate in Chicago and this was their response
> Subject: Re: Question about airport transit visa
> Date: Wed, 6 Apr 2005 09:11:09 -0500
>
> you do need a transit visa, you may ,with a valid
> visa, apply for your
> transit visa at the Frankfurt Airport, untill
> further notice.
>
> With kind regards.
> ______________________________________________________________________
>
> Consulate General of the Federal Republic of Germany
> 676 N. Michigan Ave., Suite 3200
> Chicago, IL 60611
>
> phone: 312-202-0480
> fax: 312-202-0466
>
www.germany.info/chicago
> ----- Original Message -----
> To: <chicago@germanconsulate.org>
> Sent: Tuesday, April 05, 2005 9:27 AM
> Subject: Question about airport transit visa
>
>
> > Hello,
> >
> > I and my wife are Indian nationals with Indian
> > passports who will be transiting through Frankfurt
> > en route to India from Chicago for our US
> > Immigration interview at the US consulate in India
> and
> > also on our way back.
> >
> > We hold H1 and H4 visas respectively, valid until
> > September 2006 and while returning,we expect our
> > passports will be stamped with the machine
> readable immigrant visa stamp from the US Consulate.
> >
> > Would we require Airport transit visas since we
> would have valid US visas both ways? As per the website,
> I assumed we would not, per exemption 4 for
> residents of India but was hoping to confirm.
> >
> > Please do let me know.
> >
> > Thanks much,
================================
I suppose this confirms that they would issue a transit visa upon arrival at Frankfurt and possibly the change in regulation came about after your trip KovaiGC.
Thanks to all who replied for your patience and time. Will post interview details once I am done. Good luck to all of you.