What green chilli is being referred to in an indian lamb sheek kebab recipe?

For reference, a sheekh kebab is spiced minced meat pressed onto a skewer and barbecued. There are no binding agents like egg or breadcrumbs in a traditional recipe, so you want to avoid any extra moisture in your ingredients or it may not hold together.

An authentic recipe will call for green chilies, not green peppers. The chilies need to be the your birds eye style, narrow tapered chilies with thin walls, not thick walled chilies like jalapenos because they contain too much moisture. Bell peppers are not a substitute for the same reason.

There are many green chili varieties which would work in the recipe, and they vary from mild to tonsil-searing. Which to use depends on how hot you want the result to be and what's available in your local area. If you don't want that spicy and all you can find are hot ones then de-seed them and just add less - it's all getting pureed anyway.

Tips for making good meatballs and mince-based kebabs:

1. Microwave and then eat a small amount after mixing the ingredients to make sure you get the right levels of salt and heat from the chili. Keep adjusting, microwaving and tasting until it's right. Keep in mind that the spices won't necessarily come out right away which is why you do 2.
2. Let the mix rest in the fridge for at least an hour, preferably several, to let the flavors combine. It also helps the kebabs to stick together

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This type green chili is often used in seekh kabab to make it spicy. It is optional to use you can avoid green chili with red chilli powder or cayenne. Lamb is a red meat, it is better to use red chilli powder than green chili.

You can use jalapenos as well if you finely chopped them. Bell peppers are not substitute for green chili but you can use it for a lamb seekh kabab. You can read the recipe of lamb Gilafi Seekh Kebab in which finely chopped bell peppers are used. https://www.hassanchef.com/2019/02/best-lamb-mutton-gilafi-seekh-kebab.html

Interestingly there is an Indian/Bangladeshi chili that translates directly to "Green Chili"; Kancha Morich AKA the variant name Kasa Morris.

As I found in my answer to this question, this name is very non-specific to the type, but seems to be most closely associated with a form of longish green chili common in Indian green-grocery shops, very similar to those posted by Mobasir hassan. These are moderately spicy chili in the sort of Jalapeno range of heat.