This is one of the best kept secrets of Indian cooking.
When your Indian recipe calls for red chillies, use dried red chillies. When your Indian recipe calls for green chillies, use fresh green chillies. There, I have let you into the secret.
Use them Whole, with Caution
Most Indian recipes use the chillies whole. But beware, a dried red chilli or a whole green chilli thrown into hot ghee or oil may puff up and explode! To avoid this, nip the ends off of the dried red chillies and split the fresh green chillies from the tail up towards the head, without splitting it in two. This will stop them exploding, yet leave them large enough in the final dish that you can locate them and leave them on the side of the plate. (Or eat them if you LOVE that level of heat.)
What chillies should I use?
Purists will be particular about the type of chilli, but I will use what I have at hand. Each will give a slightly different nuanced flavour to the dish. In India, the Cayenne Pepper is the most widely used, although there are others that are common, and many, many regional varieties. Here are 8 Chillies worth becoming familiar with.
For dried chillies, your Indian grocer will have 2 or three different ones (or you may need to visit several Indian grocers), from the long cayenne type, to Kashmiri Chillies (known for their colour and very mild heat) and shorter, hotter chillies.
I grow several different types of chilli at home, and dry the red ones in the sun or in the dehydrator. Unless I am looking for a specific flavour, I will use which ever is available at the time.
Why both red and green chillies in a recipe?
Why dried red chilli and/or chilli powder, and green chilli both in an Indian recipe? Red is for color, depth of flavour and heat. Green for freshness, flavor and bite.
Are you looking for more information? You might also like to read All About Chillies and Chilli Types and When and How to Use Chillies in Indian Cooking. Also find out about the Dried Yoghurt Chillies of Kerala, and the Stuffed, Dried Chillies.