Chop the water chestnuts into small pieces, about the size of a pomegranate seed. Divide into two bowls.
Add the red food colouring to one bowl, and the green food colouring to the other bowl. Mix using separate spoons until each seed is completely coloured.
Add 1/4 cup of tapioca starch into each bowl, and stir until coated. Place the seeds into a sieve so that excess flour can be shaken off, then place seeds into a clean bowl. The one bowl for both colours is fine at this point.
Bring a medium-sized pot of water to the boil, and prepare an ice bath by placing ice cubes into a bowl and adding cold water.
Once the water is boiling, use your fingers to drop the pomegranate seeds in a few at a time. Stir to prevent seeds from sticking.
The seeds will be cooked once they start to float, and the water has returned to the boil - about a minute or so. Once cooked use a slotted spoon to remove and place immediately in the ice bath.
After five minutes or so in the ice bath, transfer to a clean container and add just enough water to cover, then refrigerate.