Start by heating 1 teaspoon of oil in a pot or pan. Once hot enough, add chopped onions and the cubes of green and red bell peppers. Sauté for about 2 minutes until they soften, then set aside.
In the same pot, add 1 tablespoon of oil and heat it. Once hot, add the chicken cubes and sauté for roughly 1 minute over medium-high flame.
Sprinkle in salt, ¼ teaspoon of turmeric powder, and ¼ teaspoon of chili powder. Stir-fry the chicken for about 4-5 minutes until well fried and coated with the spices. Transfer to a plate and set aside.
Heat the remaining oil and butter in the pan. Add finely chopped onion, garlic, and ginger. Sauté for 1-2 minutes until the onion is softened and fragrant.
Toss in ground cumin, coriander, black pepper, turmeric powder, and red chili powder. Stir well to combine the spices with the aromatics.
Immediately add 1-2 tablespoons of water and sauté for a couple of seconds to prevent the spices from burning.
Add the chopped tomatoes and a pinch of salt to the pan. Stir and cook until the tomatoes soften and turn mushy—about 3-4 minutes.
Mix in the tomato ketchup, stirring to incorporate it into the sauce.
Add the sautéed chicken back to the pan and stir-fry for 1-2 minutes over medium flame.
Pour in ½ cup of warm water, stirring to combine everything into a smooth sauce.
Toss in the slit chilies, sautéed onion, and bell peppers. Stir well, cover the pan, and let it cook until the chicken is tender—about 10 minutes.
Turn off the heat and sprinkle in garam masala, chopped coriander, and kasuri methi if desired. Stir gently to mix and then serve hot!