Preheat oven at 375-degree Fahrenheit and prepare a baking sheet with parchment paper. In a mixing bowl combine 1 tsp turmeric and 1/2 tsp salt. Mix it well and then toss in chopped tofu to it. Mix gently so that each tofu piece is well coated with turmeric.
Spoon them on the prepared baking sheet and spread it nicely making sure that no pieces overlap each other. Place the baking sheet in the middle rack of the preheated oven and bake it for 25 minutes. Once done, turn off the oven, take it out and keep it aside.
In the meanwhile, in a blender, combine all the grinding ingredients (onion, tomato, ginger, garlic, cashew nuts, coconut milk) and blend it smooth.
Heat a nonstick pan with high edges or a nonstick stock pot and pour the blended onion masala into it. Stir and cook covered for about 15 minutes at medium-high flame or until it thickens and reduces. Keep stirring at intervals of 3-4 minutes to make sure it does not stick at the bottom. Be careful of the masala splashing when you remove the lid.
Bring the flame to low-medium heat and stir nicely. Then add ¼ tsp turmeric powder, chili powder, coriander powder, cumin powder, garam masala, dried fenugreek. Mix well and sauté for 5 minutes at medium-high.
Now, toss the baked tofu into the gravy and gently mix everything at high flame for 1-2 minutes.
Now, lower the flame and add 1 cup coconut milk, salt and sugar. Stir very well and cover for 2 minutes. Turn it off and remove the lid. Mix everything once again.
Garnish with chopped cilantro and serve with naan and rice.