1/2 fresh coconut ,grated (about 1/2 lb), (or 1/3 lb frozen grated coconut)
6 small red dried chili peppers (or 2 tablespoons crushed red pepper)
1/2 teaspoon salt
1 teaspoon sugar
6 small Bombay onions or 1 red onion, diced
1 tablespoon Maldive fish chips (optional)
Juice of 1 lime
Using a large mortar and pestle (or working in batches in a smaller mortar and pestle), grind the dried red chilies with the salt and sugar into a fine paste until there are no chili seeds visible in the paste.
Then, add the Maldive fish chips (optional), and grind a little more.
Next, add the freshly shredded coconut to combine with the paste. The whole idea at this stage is to get the coconut to absorb the flavor and get the color of the chili paste.
Finely, add the diced red onions. Grind a couple more minutes until obtaining a paste with enough texture.
Add the juice of the lime, mix well, and serve