In its 665-page World Report 2013, it also found fault with India's failure to hold public officials accountable for abuses.
India did make progress in some areas, including new legislation to protect children from sexual abuse and stronger support for international resolutions to protect human rights in other countries, it said.
Efforts to end serious abuses by Indian security forces will be hampered so long as a culture of impunity persists in the country, it said.
The government did not revoke the Armed Forces Special Powers Act, which provides effective immunity to soldiers who commit major rights abuses, it pointed out.
Legislation to prevent torture in custody and hold torturers accountable was not enacted.
The government still used a colonial-era sedition law and other legislation to silence critics on a range of issues, it said.
There were new restrictions on internet freedom arising in part from concerns about the use of social media to organise protests.
Said Meenakshi Ganguly, South Asia director at Human Rights Watch: "While officials frequently point to India's vibrant and independent civil society as a sign of a thriving democracy, the government increasingly uses its draconian laws that can silence dissent."
Abuses by both government and opposition forces occurred in India's conflict areas, the report said.
While the level of violence in Jammu and Kashmir was on a decline for the last two years, several elected village council leaders resigned following threats and attacks from separatists.
Violence against women continued unabated with increased reports of sexual assault. Massive protests sparked by the Dec 16 gang rape and death of a 23-year-old student in New Delhi roiled urban centres across India.
"Global revulsion over the Delhi gang rape should send a message to the Indian leadership to bring about long overdue reforms to criminalize the full range of sexual assault and to protect women's dignity and rights," said Ganguly.
"Urgently needed are resources to enforce India's laws and hold accountable officials who don't discharge their duties in a sensitive way," she said.
As a positive step, parliament passed a new law to protect children from sexual abuse, and the government sought to extend the ban on employment of children under 14 to many industries beyond hazardous jobs.
The government also took significant action toward encouraging medical care centres, especially cancer centers, to offer palliative care to alleviate the suffering of millions of persons with incurable diseases from pain and other symptoms.
For some victims and families of victims of the 2002 Gujarat riots, justice came in the form of prosecutions of several suspects, resulting in more than 75 convictions in the last year.
These included the conviction of Maya Kodnani, a former minister and a leader of Bajrang Dal.
Internationally, India supported several United Nations resolutions aimed at promoting human rights in other countries, most significantly Sri Lanka.
London: India's human rights situation took serious turns for the worse with respect to civil society protections and sexual violence against women, Human Rights Watch said on Friday.
First Published: Friday, February 01, 2013, 13:17