In a saute pan, add the tsp of oil, peanuts, green chilies and garlic. Stir often to ensure the peanuts are evenly toasted. About 5-7 minutes. Make sure the peanuts are light brown.
Once peanuts are light brown, add the tamarind pulp. Saute until the water evaporates from the tamarind paste. About 2-3 minutes. (Don't be afraid to add water to the tamarind if you think it is getting too brown in the pan)
If your food processor, Vita-Mix, blender doesn’t work well with hot foods, transfer peanut/ tamarind mixture to a plate to cool before blending.
Add all ingredients to your blender with 1 tsp of salt and a cup of water. Blend/ process until it becomes a smooth paste. The mixture should be like a thick soup, (not solid like peanut butter). If needed, add a small amount of water to thin. Transfer to a large bowl. Optional: tempering ingredients will be added before serving.
Serve in individual bowls as a dipping sauce for dosas, fritters, vada, or idly. Garnish with cilantro.