Would a German transit visa serve my purpose?

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Yes, you will be able to transit in both Frankfurt and Munich on Lufthansa with an ATV if all your flights are booked on the same ticket. In this case, you will be given your boarding passes for each leg of your flight at the point of departure (Delhi on your outbound trip, and Mexico City on your inbound trip). Your bags will also be checked till the final destination. At no point during your transit will you enter the Schengen Zone. If, for whatever reason, you are not issued boarding passes for the whole trip at the two points of departure, you will be able to collect them at the transit airport at Lufthansa's customer assistance counter.

Source: I'm a frequent flier on Lufthansa transiting through FRA and MUC often.

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