Here's something I googled, wwh, that presents a very interesting theory about why Doyle may have used the term:

"Consider Thaddeus Sholto's use of the word '"khitmugar"' to his servant. Baring-Gould's annotation accompanying this word notes that it is 'Hindu for butler or man-servant' (624). The metonym, as defined by Ashcroft, Griffiths and Tiffin, signifies 'the part that stands for the whole....' (53). In the context of Doyle's text, and in the imperially conditioned mind of its contemporary reader, '"khitmugar"' signifies the presence and "alien" status of the Indian figure and culture in relation to British society. Openly and covertly, The Sign of Four makes itself acceptable to the imperialist ideology in late Victorian culture and its attendant literary canon. In turn, as has been noted, all these elements are offshoots which sprout from and return to nourish the ideology Said terms Orientalism. "

http://www.qub.ac.uk/en/imperial/india/conan-doyle.htm