The quality of red chili is characterized based on its color and pungency. Several factors like humidity, temperature, light, and storage conditions affect the characteristic qualities of red chili, thus preservation required several measures. Instead of ensuring these measures, traders are using oil and Sudan dye in red chili to increase the value of an inferior product. Thus, this work presents the feasibility of utilizing a hyperspectral camera for the detection of oil and Sudan dye in red chili. This study describes the important wavelengths (500–700 nm) where different adulteration affects the response of the reflected spectrum. These wavelengths are then utilized for training an Support Vector Machine (SVM) algorithm to detect pure, oil-adulterated, and Sudan dye-adulterated red chili. The classification performance achieves 97% with the reduced dimensionality and 100% with complete validation data. The trained algorithm is further tested on separate data with different adulteration levels in comparison to the training data. Results show that the algorithm successfully classifies pure, oil-adulterated, and Sudan-adulterated red chili with an accuracy of 100%.