1. Heat 1/4 cup water and soak the red chilies in it for 1/2 hour.Pressure cook baby potatoes, peel the skin and keep it aside.Grind together soaked red chilies, sambar onion (shallots), garlic pods, white vinegar and salt together to a smooth fine paste. Do not add water while grinding.
2. Heat 2 tsp oil in a shallow frying pan.
3. Add the peeled baby potatoes and sauté over low flame for 2 minutes. Keep shaking the pan and tossing well, so that the potatoes become golden brown and crisp all around.
4. Add the ground paste to the potatoes and gently mix well with a fork. Cook over low flame, tossing and shaking the pan frequently, while adding the remaining oil from time to time for the ground paste to get cooked.After 10 – 15 minutes of cooking, the raw smell from the paste would have gone and it would have coated the potatoes well.
5. Remove from fire.
6. Serve hot with steaming rice and Rasam.