Press the saute button on the instant pot. Once it displays hot, add oil and add peeled baby potatoes to the oil.
Cook the potatoes on HIGH for 7-8 minutes until light brown. Remove from oil and set it aside.
To the insert add black cardamom, whole red chilies, and cumin seeds. Saute for 30 seconds. (Step by step pics above in the main post)
When the cumin seeds start to crackle, stir in the minced garlic, ginger paste, and pureed onion.
Cook for 5-8 minutes, stirring occasionally. Add pureed tomatoes to the cooked onion paste.
Stir in the spices and cashew paste. Mix it well. Let it sauté for 2 minutes, and now it's time to add dried fenugreek leaves. Crush the dried leaves with your hand and add it to the cooking sauce/masala.
Keep stirring occasionally and cook for another 5-6 minutes or until the oil starts to float on top - meaning: all the liquid will evaporate by now, spices are cooked well, and bubbles will begin to form over the masala/sauce. Soon you will start to see a thin layer of oil floating on top of the masala/sauce.
Return the baby potatoes to this thick sauce/masala and coat it thoroughly in the sauce.
Pour in the water and mix to combine. (Step by step pics above in the main post)
Close the lid and seal the pot. Cancel the ‘Saute‘ mode and press the ‘Manual or Pressure Cook‘ button. Cook on HIGH PRESSURE for 7 minutes. Make sure that the pressure release valve is in place, and it is set to the Sealing position.
After the Instant Pot beeps, allow the steam to release naturally (NPR). After the pin drops, carefully open the lid.
Instant Pot Dum aloo is ready. Feel free to adjust the consistency to your liking.
Serve the Instant Pot dum aloo hot with rice, roti or naan.