Heat the oil in a large skillet over medium heat; fry the red chile peppers, cumin seeds, and mustard seeds in the hot oil until the seeds begin to splutter, 2 to 3 minutes.
Sprinkle the asafoetida powder over the seeds and add the curry leaves. Stir the onions, green chile peppers, and turmeric powder into the mixture; cook and stir until the onions are softened, 3 to 5 minutes.
Add the tomatoes, red chili powder, sugar, and salt; continue cooking until the tomatoes are pulpy.
Pour the water into the mixture; simmer until the curry begins to thicken, 5 to 10 minutes.