Traveling back to US on the following itinerary:
Delhi - Munich - Zurich - Boston
Should I get the Schengen visa from German Embassy or the Swiss Embassy?
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For the Short Stay visa the state where it should be applied at is the state where you will spend the longest time. Since this is not going to stay in Schengen area this shifts to the country of entry in this case Germany.
However the transit visa does not apply to you and you will need a visitors' visa since you're transiting through 2 airports in Schengen area. See Important Note concerning Airport transit last paragraph item 2.