In a blender, combine all the ingredients except the oil, prawns and salt. Blend till it is a paste.
In a saucepan, heat the oil and add the paste. Add the water and stir over a low-medium heat. Once it starts boiling, add the fresh (or frozen) prawns and salt. Allow to simmer for 7 minutes till prawns are cooked (5 minutes for pre-cooked prawns). Remove from heat and serve with plain basmati rice.