SummaryRambutan peel (RP), an agricultural by‐product from rambutan trading, contains the red pigment anthocyanin. This research explores developing a colouring agent from RP, utilising cardamom oil (CM) to enhance colour stability, improve antimicrobial functionality, and create a new high‐value red colouring agent from fruit waste. A colouring agent was produced by placing 50 g of RP inside a 1 L glass box, and varying amounts of CM (5 μL, 25 μL, 50 μL, and 100 μL) on filter paper were placed inside the box lid. The box was sealed and left closed for 8 h to allow CM vapour to release onto the surface of RP before being dried at 30 °C and ground into powder. The antibacterial impact of CM‐treated RP on Staphylococcus aureus was assessed using the nutrient broth. The CM‐treated RP powder was used as a food colouring agent in shrimp paste to evaluate the shelf life of shrimp paste during storage at 30 °C. Results revealed that treated RP with 25 μL of CM showed the best red colour appearance in the dried powder. RP with 25 μL of CM exhibited time killing against S. aureus (approximately 4 log10cfu g−1) after being added to the medium for 6 h, disrupting the cell membrane integrity of S. aureus and leading to cell lysis. RP treated with 25 μL of CM also prevented darkening in shrimp paste, maintaining higher values for L* and a*, resulting in increased lightness and a more red appearance. It also inhibited pathogenic bacteria, extending shelf life, and preserving colour stability for 14 days, compared to the control's 7 days. These insights provide valuable guidance for the sustainable utilisation of agricultural waste in the food colouring industry.