In a blender or food processor, combine the chopped onion, red chili, grated ginger, and minced garlic until a smooth paste forms. Set this mixture aside.
Warm the vegetable oil in a large pan over medium heat. Once hot, add the fenugreek seeds, mustard seeds, turmeric, hing, and curry leaves. Stir and sauté for about 2 minutes.
Introduce the onion-chili paste to the pan, cooking it for another 2-3 minutes, allowing the flavors to meld.
Add the prawns and water to the pan, stirring occasionally until the prawns turn a pinkish hue.
Pour in the coconut milk, season with salt and pepper, and stir in the lime juice. Continue to simmer for a few minutes, letting the prawns cook through completely.
Serve hot with parathas, naan, or steamed rice. Enjoy!