Soak the dried Kashmiri red chilies in warm water for about 30 minutes. Now remove the seeds and grind the chilies to a paste using very little water.
In a non stick pan, heat the oil on a medium heat. Add the chopped Garlic and Ginger. Stir well and now add the Chili paste and saute until the oil starts oozing out from the mixture.
Add Sugar, Salt and Black pepper powder into the paste. Be careful while adding salt, as we are going to add Soy sauce which also has salt, so add accordingly. Mix it well.
Add Soy sauce and Vinegar into the sauce.
Finally add some water into the mixture so that it attains a consistency of a sauce. Check for the seasoning at this stage.
Turn off the flame. Transfer the sauce to an air tight container once it is cooled then refrigerate. Use as per requirement.
My Tip: This sauce is a blend of many flavours. The dried red chilies and black pepper make the sauce fiery hot whereas the soy sauce and vinegar give the desired sourness. Little sugar is added to balance the spicy flavors. I have used Kashmiri red chilies which give the desired colour to the sauce.