Anupam Kher, who had agreed to play the role of the German dictator in "Dear Friend Hitler," wrote on the micro-blogging website Twitter that he had withdrawn because "sometimes human emotions are more important than cinema."
"Thanks for your varied reactions to my opting out of Hitler. After 400 films in 26 years I have the right to be wrong and still be HAPPY," the veteran Bollywood actor added.
The film, budgeted at up to $3 million, has drawn opposition from sections of India's small Jewish community and campaigners abroad for its proposed portrayal of the fascist leader, according to local media reports.
Comments from director Rakesh Ranjan Kumar that the film would show Hitler's "love" for India came under fire from historians, who contend that the German dictator had no respect for a people he viewed as racially inferior.
The film, which from early comments has more than a passing resemblance to the critically acclaimed 2004 German film "Downfall" starring Bruno Ganz, will focus on Hitler's personality and relationships during his last days.
Its makers say the title alludes to two letters written to Hitler by India's independence hero Mahatma Gandhi. No decision yet has been taken on whether singing and dance routines will be included in the production.
The moustachioed and Mumbai-based Kher was not immediately available for comment.
He was set to star opposite former Miss India Neha Dhupia who is lined up to portray Eva Braun, whom Hitler married hours before they committed suicide in April 1945.