According to the stuff.co.nz website, vice-captain Watson has returned home to Sydney for the birth of his first child but has also complained his one-match suspension for disciplinary reasons is harsh.
Watson, Test quick James Pattinson and squad members Usman Khwaja and Mitchell Johnson were all stood down from selection for Thursday's third Test in Mohali for failing to complete a homework assignment which was due on Saturday night.
Watson, 31, says he's considering his future in Test cricket.
Advertisement"Watto has made it clear to everybody that that's something he's thinking about while he's home," Clarke told reporters on Wednesday.
"He's vice-captain of this team and he's a big part of this team.
"From the conversation Watto and I have had, 100 percent he has gone home for the birth of his first child, which is very exciting for him.
"(Wife) Lee has the baby in the next few days and Watto is back here playing the fourth Test as our vice-captain.
"That's the best-case scenario from my point of view and from the team's point of view. The rest is really up to Shane."
Cricket Australia's high-performance chief Pat Howard has questioned Watson's team ethic, saying the 40-Test veteran is "sometimes" a good team man.
Watson hit back upon arrival at Sydney airport on Tuesday by saying the former rugby international Howard hadn't been involved in cricket for long and didn't know him well.
"I don't think it's fair to Watto and I don't think it's fair to Pat that I get involved in that," Clarke said.
"Watto has been around for a long time.
"Pat has been around sport for a very long time. I know those two will be in communication.
"For me the focus is this team and trying to have success in these two Test matches."
Clarke backed Watson's comments from overnight that the pair got on well and denied a rift between the team's two on-field leaders.
Arthur, Clarke and team manager Gavin Dovey made the decision to suspend the four players.