Heat 1 tablespoon oil in a wide pan on medium. Add the dry red chillies. Stir 15 seconds.
Add the sliced onions and salt. Cook 10 to 12 minutes, stirring often, until the onions are soft and the edges are brown-pink. Do not rush this on high heat.
Stir in tamarind and jaggery. Cook 1 minute. Cool 5 minutes.
Blend with 2 tablespoons water to a coarse puree. Add the third tablespoon only if the blender stalls. Taste for salt and jaggery.
Tadka
Heat 1 teaspoon oil. Add mustard seeds. When they pop, add urad dal.
Stir until the dal is pale gold, about 20 seconds. Add curry leaves if using.
Pour over the chutney. Stir. The color should look deep mahogany in the bowl.
Notes
Slice the onions even. Thick wedges stay raw in the middle and burn on the edges.Kashmiri chillies give a redder color and less heat. Regular dry red chillies are hotter and browner.Store in an airtight container in the refrigerator for up to 4 days. The color deepens on day two.I do not freeze this. Onions go dull and watery.