Flights between two airports in the schengen area are treated as domestic flights.
The same terminal and even the same physical gate may be used for both domestic (within schengen) and international (outside schengen) flights but the gate numbers will be different and the passengers will be kept in seperate areas (for example by using different floors). To move between the domestis and international areas you will have to go through immigration control.
Unfortunately this means that you will have to enter the Schengen area in vienna to catch your vienna to frankfurt flight. You will then leave the schengen area in frankfurt.
An airside transit visa (type A) will not be sufficient for this. There used to be a landside transit visa (type B) but it was scrapped in 2010. So you will need a regular visitor visa (type C).
The answer to your question is yes you will need a transit visa but in Vienna rather than in Germany.
According to Germany missions page you don’t need a visa since you’re a holder of the US Visa:
Exceptions: Nationals from the above list are entitled to transit through the international transit zones without an airport transit visa:
- If they hold a valid visa for the United States of America
According to the Austrian foreign ministry you as an Indian citizen would not have required a visa if you were staying within the international transit zone of an airport. This however doesn’t apply in your case since your connecting flight is "domestic" so to speak, so a transit visa will be necessary for Vienna airport rather then Frankfurt.
Credit:stackoverflow.com‘
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