First add 1/2 cup peanuts and dry roast it. I had de-skinned peanuts so used it as such. If you have peanuts with skin then roast until crisp and remove skin.
Roast until golden as shown. Brown spots here and there is enough.
Transfer to a plate and set aside to cool.
Now add 1 teaspoon of oil then add around 15 small onion, 2 red chilies and 2 garlic.
Saute until golden as shown below.
Add tamarind and saute for a minute then switch off.
Add 1 teaspoon tamarind and saute for a minute then switch off.
Transfer to a plate and set aside.
Cool down completely then transfer to a mixer along with salt and little say 1/4 cup water. You can add more water later.
Grind it smooth and creamy.
Transfer to a bowl, add water and adjust consistency.
It should be slightly thin so add water accordingly.
To make the tempering : Heat 2 teaspoon oil then add 1 teaspoon mustard seeds let it crackle then add 1 teaspoon urad dal let it become golden then add few curry leaves and a pinch hing. Swirl and switch off.
Transfer the tempering to chutney.
Mix well. Peanut Chutney ready.