Add dry red chilies, coriander seeds, cloves, cinnamon, green cardamoms, peppercorns, cumin seeds, and mustard seeds to a skillet.
Dry roast on medium heat until fragrant and slightly browned (3-4 minutes). Keep stirring continuously while roasting.
Once the spices are roasted, remove the skillet from the heat and let the spices cool down completely.
Add the roasted spices to a high-speed blender along with ginger, garlic, white vinegar, tamarind paste, and ½ cup of water and blend to make a smooth paste.
Scrape the sides of the blender a few times while making the paste.
Vindaloo masala paste is ready. Set it aside.
Heat oil in a large pot over medium-high heat.
When the oil is hot, add onions and fry till golden brown (10-12 minutes), stirring frequently.
Add chicken pieces to the pot and cook on high heat for 3-4 minutes. Stir frequently while cooking.
Add tomato puree and the vindaloo masala paste that we made earlier to the pot and mix well.
Now add salt, turmeric powder, and 1 cup water to the pot and stir gently.
Reduce the heat to low.
Cover the pot with a lid and cook for 45-50 minutes until the chicken is cooked well and the oil starts to separate on top of the pan. Stir a few times while cooking.
Add sugar and cook for another minute. Chicken vindaloo is ready to be served.
