Chop onions and fry in 1 tbsp oil until they become transparent. Set aside.
In the same pan, heat 1 tbsp oil and fry the red chilies and dal.
Grind the fried ingredients, onions and salt in a blender for 2 minutes to form a smooth paste.
Heat 1 tbsp oil and fry the ground chutney for 10 minutes. This chutney remains for 2-3 days.
Serve with Dosa or idali.