Take a bowl and add curd (dahi), turmeric powder, chilli powder, coriander powder, cumin powder and salt. Mix it well and keep it aside.
Wash, peel and dice the potatoes. Keep the diced potatoes in water.
Boil water in a saucepan and add ½ teaspoon of salt in the water. Add the diced potatoes and cook them for 8-10 minutes on a high flame until they are cooked thoroughly. Do not overcook the potatoes.
Transfer the cooked potatoes to a plate and let it cool down.
Heat oil in a pan or kadhai. Add ¼ tsp of turmeric to the oil. Stir it well. Add boiled potatoes to the oil and fry them until golden brown.
Transfer the fried potatoes to a tissue paper-lined plate. Set them aside.
Add cinnamon, black cardamom, cumin seeds, hing (asafoetida) and bay leaf in the same pan or kadhai. Let it crackle.
Add finely chopped onion and green chillies. Stir it well and cook the onion for 4-5 minutes until it turns soft and translucent.
Add ginger-garlic paste and cook it for 2-3 minutes until its raw smell goes away.
Add curd and spice mixture to the pan. Cook it for 8-10 minutes on a low flame until the raw smell of spices and curd disappears, and oil starts releasing from the sides of the pan.
Add Kasuri methi and potatoes and mix it gently. Add water and adjust the consistency and seasoning of the curry according to the taste.
Cover and simmer the potatoes in the curry for 2-3 minutes. Switch off the flame and add fresh coriander leaves.
Dahi aloo is ready to serve.