Most Indian cooking calls for the use of chillies of some kind dry red chillies, fresh green chillies, red chilli powder. Each type of chilli has a different potency and heat. Some dishes rely heavily on chilli for their flavor (for example Rasam (pepper water), Vindaloo, Sorpatel ) so the only solution is to reduce the amount you use.
In other dishes, chilli is only used to add the heat which enhances other flavors (for example Mutter Paneer (peas and cottage cheese), Rajma (red kidney bean curry) ). In this case you can omit the chilli altogether.