Transit Visa in Munich (for Mexico travel) for Indian passport holder

According to the German embassy in India, Indian passport holders need an airport transit visa, unless they fall into one of the exemptions (which you unfortunately do not):

Indian nationals generally require an airport transit visa for the Schengen area. This visa allows a short stop-over at an international airport only. Neither leaving the airport’s international transit area nor overnight stays in a hotel are possible. If you need to leave the international transit area (i.e. in order to catch a connecting flight at another airport to leave the Schengen area), please apply for a regular Schengen visa.

Exemptions:
a) Indian nationals holding a valid visa or residence permit from a member state of the Schengen area or Bulgaria, Romania, Croatia, Cyprus, Liechtenstein, Ireland, UK, Canada, Japan, USA (except for holders of an US “Advanced Parole Document”)
b) Indian nationals holding a valid residence permit Andorra, Monaco or San Marino
c) Diplomatic passport holders generally do not require an airport transit visa.

The same rules appear in Timatic, the system which the airlines will use to determine if you can be boarded. In relevant part:

Visa required, except for Nationals of India holding onward tickets in transit through Cologne/Bonn (CGN), Frankfurt (FRA), Munich (MUC), Hamburg (HAM), Dusseldorf (DUS) or Berlin Tegel (TXL) AND meeting one of the following conditions:

  • holding a valid visa issued by Bulgaria, Canada, Croatia, Cyprus, Ireland (Rep.), Japan, Romania, USA or United Kingdom;