Set the Instant Pot to saute mode and add oil. Once it heats, add the whole spices (bay leaf, cinnamon, whole pepper, cardamom, and cloves) and saute for a few seconds.
Add the lamb and saute for 2-3 minutes until they are browned.
Next, add the ground onion paste and saute for 2-3 minutes until the raw smell goes.
Next, add the cashew paste, whisked (or blended) yogurt, green chilies, salt, and sugar. Mix well and saute for 1-2 minutes.
Add one cup of water and deglaze the pot.
Secure the lid and pressure cook for 20 minutes on LOW pressure.
Let the pressure come down naturally for 10 minutes, then do a quick release of the remaining pressure.
Add the garam masala and mix well. Serve warm.