Rinse rice in a fine mesh sieve until the water runs clear. If you don't have a fine mesh sieve you can also use a bowl place rice in bowl fill with water, stir water and rice with a whisk, pour off water, and repeat until water is clear. Drain as much water off as possible (which isn't hard the rice will want to stay in the bottom of the bowl) and use it in the recipe. Set rice aside.
Add oil to dutch oven (or any oven safe pan with a lid) once the oil is sliding around and hot, add onion and saute until translucent.
Add in the rinsed rice, move around with a spatula until rice starts to sizzle and just starts to brown and gets toasty. Quickly add in garlic and stir into the rice.
Add tomato puree + one can of water, and the diced green chilis. Stir to combine.
Add spices: salt, sugar, chili powder, cumin. Stir to combine. Add in 2 cups very hot, or boiling water and veggies (peas and carrots) stir to combine. Bring to a low bowl or simmer.
As soon as rice starts to boil, place lid on top and place in 325℉ oven for 45 minutes.
Remove from oven and fluff the rice using a fork. Serve immediately.
Notes
Stove top method: Cook on medium low to low heat for 30 minutes. turn off heat and let set for 15 minutes remove lid and fluff rice. Spanish Rice with ground meat - brown the ground beef, turkey, or chicken in pan remove with a slotted spoon to a dish. Pour off any excess grease. Continue with the recipe as stated above add the meat back in after the spices, and continue on by adding water and placing in oven till done.