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This is a classic curry from Kerala, and, in my opinion, just about every household makes this on the weekends - the way we have butter chicken in north India, they have chicken Peralen.
In Kerala, shallots are used more often than onions, and they are almost always fried and added just before serving for extra seasoning called a tarka, as in this recipe.
Coconut vinegar would also be used in Kerala, but I know that even when you find it in the UK it is very expensive, so ordinary white wine vinegar is just fine.