The actor said that he quit the movie, in which he was to play the German dictator, because he did not want to upset any of his fans.
"I wish to withdraw from the film because it is creating ill feelings among my fans and I respect their sentiments. I was never affected by commercial considerations but social opinions always matter to me," he told Real Bollywood.
Kher, 55, reportedly left the movie because India's Jewish community has led protests against it.
Indian Jewish Federation chairman Jonathan Solomon said: "The filmmaker [Rakesh Ranjan Kumar] is hurting the feelings of the Jewish community who have suffered a lot."