In a wide-bottomed pot or Dutch oven, heat the coconut oil over medium heat until shimmering. Add the mustard seeds and cook until just beginning to pop, 30–60 seconds. Add the curry leaves and let crisp for 30 seconds, then add the green chiles and sauté for 30 seconds more, until fragrant.
Add the red onions and cook for about 5 minutes, until softened. Add the ginger and garlic and cook for 1 minute, until fragrant.
Add the tandoori masala and cook for 1 minute, until lightly toasted.
Stir in the tomatoes and cook for 3 minutes, until well combined.
Add the chicken and season with salt and pepper. Stir to coat the chicken well with the spiced tomato mixture and cook until no longer pink.
Add the coconut milk, tamarind paste, and sugar and stir well. Reduce the heat to medium-low, cover, and cook for 15 minutes, or until the chicken is cooked through and the oil begins to separate from the sauce.
Spoon the curry over steamed rice. Garnish with cilantro and a sprinkle of chile powder, if desired.