Cook the gnocchi according to package directions until they float. Drain and set aside.
In a large skillet or pot, melt the butter with the oil over medium heat.
Add the chopped onion and cook until soft and translucent, about 5 to 7 minutes.
Stir in the ginger-garlic paste and cook for 1 minute until fragrant.
Add the cumin, coriander, turmeric, garam masala, and cayenne pepper. Cook the spices for 30 seconds, stirring constantly.
Pour in the crushed tomatoes and water or broth. Bring the mixture to a simmer.
Reduce the heat to low, cover, and let the sauce cook for 10 minutes, allowing the flavors to meld.
Stir in the heavy cream and cashew butter (or cashew paste). Mix well until the sauce is smooth.
Add the sugar and salt. Taste the sauce and adjust seasoning if needed.
Stir in the crushed kasoori methi.
Add the cooked gnocchi to the sauce. Gently toss to coat all the dumplings evenly. Cook for 2 to 3 minutes until the gnocchi is heated through.
Serve immediately, garnished with fresh cilantro.
Notes
For a richer sauce, use homemade gnocchi. If using store-bought, ensure you cook them just until they float for the best texture against the thick sauce.
If you do not have cashew butter, soak 1/4 cup of raw cashews in hot water for 15 minutes, then blend them with a few tablespoons of water until completely smooth before adding to the sauce.
This dish pairs well with plain basmati rice or warm naan bread to soak up the extra sauce.