Wash the green chili thoroughly in cold water. Remove the stems.
Cut the chilies into two halves, lengthwise. Remove the seeds using a spoon or knife. You can skip this step if the chilies are not very hot.
Heat olive oil (or any cooking oil) in a pan. Splutter the mustard seeds.
Saute ginger and garlic for 1 minute.
Now add the deseeded green chilies,water and salt. Cover the pan with a lidand cook on low heat until the chilies are soft (~ 15 minutes).
Remove the lid and cook on medium heat until all the water is evaporated.
Switch off the heat. Let the chilies cool completely.
Once cooled, grind the cooked chilies along with vinegar to make a smooth paste.
Transfer the fresh homemade green chili sauce to an air-tight glass container. This will keep in fridge for almost 2 months.
Notes
You don't have to deseed the chili if not very hot.Always use gloves while working with chilies, especially when you deseed.Vinegar helps to keep the sauce preserved.You can use any type of vinegar like apple cider vinegar, rice vinegar or anyone of your choice.