Take vinegar in a vessel and add bay leaf and some sugar in it. Bring it to boil and add shallots in it.
Keep it aside for 25 minutes.
Heat oil in a pan and add mustard seeds, cumin seeds and let it splutter.
Remove the shallots from vinegar and add the pickle masala and red chilli powder in it. mix it well.
Take the oil and pour it on the shallots. mix it again and store in an sir tight jar for use.