Add cashews to a blender and make a fine paste. Set this aside.
Add oil to a hot pan and fry dry spices till they sizzle.
Add sliced onions,fry till slightly golden.
Add ginger garlic paste, fry till the raw smell disappears.
Add mushrooms and potatoes (if using), fry on high for 2 minutes.
Add turmeric, salt, red chili powder, garam masala powder, and fry till the masala turns fragrant.
Lower the flame, add the yogurt, mix well and cook.
When it begins to bubble, add the cashew nut paste. Add more yogurt to bring it to the consistency, without adding water. Cover and cook till the mushrooms are cooked tender. Over cooking make the mushrooms soggy.