The negative from the dash indicator goes to the thermistor in the fuel tank, which is in turn connected to ground. There is always current in the circuit, but not enough to light the dash lamp when the thermistor is cold. So long as the thermistor is submerged in fuel, it stays cold and its resistance stays high, keeping the light extinguished.
When the fuel level goes below the thermistor, the small amount of current in the circuit heats the thermistor which reduces its resistance. As it gets warmer and less resistive the circuit current increases until the dash lamp illuminates.
This is why, even with very low fuel, it takes a minute for the low fuel light to turn on when you first turn on the bike.
It's also why you should not fill your tank immediately after turning the bike off if the fuel light was on. Best to let the thermistor cool off for a bit before shocking it with cold fuel.