In a greased cookie sheet spread the cashew nuts and place it in a toaster oven in a toasting mode and toast them brown. Let it cool down. (Make sure it does not burn, toasting may take about 2 minutes or less).
In small bowl combine turmeric powder and chili powder and keep it aside.
Heat a nonstick wok/pan and grease it well. Place the chopped tofu and sprinkle half of the spice powder on them. Flip over the tofu and sprinkle the rest of the spice powder. Cook for few minutes until tofu starts drying up and looks cooked. (Browning not required). Take them out of the pan and keep aside.
In a food processor combine onion, half of roasted cashew nuts, ginger garlic paste, cumin seeds, coriander seeds, cinnamon stick and ¼ cup coconut milk process it into a smooth paste.
In the same pan heat olive oil and add the star anise.
Immediately add the onion paste to the warm oil and cook until it starts releasing its juice sauteing at intervals to avoid sticking.
Add water and cook for couple of minutes stirring once.
Add tofu pieces and cook again for a minute.
Add coconut milk, salt and sugar. Mix and cook covered on a low flame for 5-7 minutes or until well cooked.
Turn off the flame add the remaining cashew nuts. Garnish with cilantro and serve warm with naan and or rice.