Mix together kashmiri chilli, coriander, turmeric, and pepper powder with 1 tsp oil and 2 -3 tbsp water to a thick paste. Keep it aside.
Heat oil (1.5 tbsp) in a clay pot/wide pan. Add mustard, fenugreek seeds, and half of the curry leaves. Let it crackle.
Add sliced pearl onion and crushed ginger & garlic. Cook till pearl onion becomes golden brown in color, 4-5 mins.
Add the spice powder paste. Mix well and cook for 3-4 mins or till the oil starts appearing.
Add pureed tomato and 1/3 cup water and salt. Mix well and bring it to a boil. Reduce the flame to the lowest and add soaked gambooge (kudampuli) along with the water. Mix well.
Add cleaned fish pieces. Rotate the pan amd make sure the pieces are covered in the gravy. Cover and cook for 15 – 20 mins, till the fish is almost done.
Once the gravy becomes thick and the fish is almost cooked, add thick coconut milk. Rotate the pan gently and let it cook for another 5 mins on the lowest flame. Remove from fire.
Drizzle some coconut oil on top, add the remaining curry leaves and let the curry rest for half an hour for the flavor to settle in.