Applying it directly to Indian retirement planning comes with caveats. It was based on historical US market returns and US inflation patterns, which don't map exactly onto Indian equity market behaviour or India's typically higher inflation rate. A rule calibrated for roughly 2-3% average inflation doesn't translate cleanly to an economy where inflation has often run closer to 5-6%.
Some Indian financial planners suggest a more conservative withdrawal rate — often in the 3-3.5% range — to account for this higher inflation environment and the historically different volatility profile of Indian equity markets compared to US markets. Others argue the underlying principle (a sustainable, inflation-adjusted withdrawal rate, reviewed periodically rather than fixed forever) matters more than the exact percentage.
Rather than treating 4% (or any single number) as gospel, it's more useful as a starting point for the conversation — the actual sustainable rate for you depends on your specific asset allocation, expected longevity, and how much flexibility you have to reduce withdrawals in a bad market year.