In a pan add 3 tsp oil and add the urad dal, red chili and tamarind.
Saute till the dal turns light golden brown.
Add the peeled small onion to the pan and add salt.
Saute till it changes color. Cook in a medium flame.
Switch off the flame and add 2 tbsp of coconut.
Cool this completely and grind into a fine paste.
Add water to adjust consistency.
Temper mustard and curry leaves in 1 tsp oil
Add it to the chutney and mix well.
Onion coconut chutney is ready.
Serve with idli or dosa.