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This was catalyzed by a question on the need for a Schengen visa for Indian citizens and the discussion that followed.

The question I posed is:

I have a valid US (F1) visa. Does that mean I can transit this way: India-EU-Madagascar (because that's the cheapest ticket - hypothetical situation). Then what? What does having a valid US (F1) visa have to do with transiting via/through EU. A valid US F1 visa doesn't mean one can enter the USA. As a student you also need a valid I-20. So to reiterate: why the rule about US visa = no need for EU transit visa?

Besides hearsay (which I am open to as long as it is rational ;)), is there some link/article that explains this requirement?

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Have you searched for Schengen Transit Visa on this site? If so you'd find questions like: travel.stackexchange.com/questions/21783/… which link to many similar questions and related articles and embassy pages. So to answer your question: why the rule about US visa = no need for EU transit visa? because the governments of Schengen countries decided that it would be the case. –  Karlson Mar 19 at 19:44
    
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There is a huge difference between "if you happen to have X, you can Y (and there are other ways to be able to Y" and "you need an X to Y." Your title is misleading - you don't need a US Visa, but if you have one it will give you some extra privileges. Why is not really our business but the best guess is so that EU airports can make some money by being used for people travelling a long way to and from the US. –  Kate Gregory Mar 19 at 20:33

2 Answers 2

There is a bit of confusion here because the rules are not simple:

  • If you have a simple US visa or are returning from one, you can transit (airside) in a Schengen airport even if citizens from your country usually need to get an airport transit visa (with some limits regarding connection times and other details). That's article 3(5) (c) of the Schengen Visa Code. If the visa is still valid, you can use this exemption even if you are not flying to the US. The rationale for that is that it's good for business, allowing European airlines to, e.g., attract travelers from India to the US.
  • If you have a residence permit in the US (and Canada, Japan, and a few others), then you can always transit in the Schengen area. That's article 3(5) (b) of the Schengen Visa Code. The rationale for that is also that it's good for business. People with an unconditional right to enter these rich countries present a lower risk of staying illegally or seeking asylum anyway.
  • In any case, all those rules are exceptions to the airport transit visa requirement. If you do not come from one of the countries with this extra requirement and you only want to transit, then you don't need a visa. If you need one, you can also of course apply for one, having a US visa makes transit more convenient because it saves you the paperwork and fee but it's never a requirement to transit in the Schengen area. Finally, if you want to enter the Schengen area and your nationality does not allow you to visit visa-free, then you do need a visa and the US visa or residence permit do not make a difference.

This is not hearsay, it's all there somewhere on the official site and on Wikipedia even if figuring it all out will take some reading. For a rundown of these rules, see Do I need a visa to transit in the Schengen area?

Note that the UK has similar rules, with slightly different restrictions (e.g. people with a simple US visa must have a ticket to the US and cannot simply transit to another destination). Also, UK visa holders are exempted from the airport transit visa requirement in the Schengen area but Schengen visa holders are not exempted from the “Direct Airside Transit Visa” requirement in the UK. Exemptions for people with a residence permit are a bit broader.

Speculating a little bit, note that an airport transit visa is only required Schengen-wide for a very small list of countries like Iraq, Congo, or Afghanistan (India is only included in a few Schengen countries but is not on the general list). I believe one concern is that many people in those countries are so desperate that they might try to get a ticket with a connection, ditch it and apply for asylum as soon as they set foot in the Schengen area.

If they make it to the airport and go for asylum, you need at least to hear their application and, depending on the country's laws and the local situation in their country of origin, it might be difficult to deport them back even if asylum is not granted. The airport transit visa is a way to avoid all that by reviewing applications beforehand and forcing airlines to check passengers accordingly. Someone with a residence permit in the US probably presents a lower risk from this point of view and could possibly even be deported to the US if necessary.

See also What are transit visas? and Transiting in a Schengen airport with a Romanian visa

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One thing visa are for is to ensure people do not overstay and restrict the frame of the stay. This is linked to the probability of people returning to their country after the stay. I suppose countries are rated by the risk of not returning to it. Having a residence permit in a country with lower risk most likely matters in the visa requirements. It increases the chances that you will leave the country you visit. This is pure speculation, but this makes sense to me.

On top of it, there are bilateral agreements and a lot of criteria, pushed for many different reasons, can be used:

Decisions on visa free access to the Schengen Area may follow from bilateral negotiations. They are based on the progress made by the countries concerned in implementing major reforms in areas such as the strengthening of the rule of law, combating of organised crime, corruption and illegal migration and improving of administrative capacity in border control and security of documents.

So this visa policy is set up based on all these criteria listed on the European Commission website.

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