firstly, add 2 tsp of oil and roast 1 tsp urad dal, 1 tsp chana dal and 4 dried kashmiri red chilli on low flame.
also add in 1 finely chopped onion.
saute the onions till they turn slightly golden in colour.
cool completely and transfer to the blender.
add in small piece tamarind, jaggery and salt to taste.
blend to smooth consistency adding ¼ cup water, or as required.
now prepare the tempering by heating 2 tsp oil.
also add in 1 tsp mustard seeds, 1 tsp urad dal, pinch of hing, 1 dried red chilli and few curry leaves.
allow the tempering to splutter.
finally, pour the tempering over onion chutney and serve along with idli or dosa.