Rinse the rice and soak at least for 10 minutes.
Add oil to the inner pot in your Instant Pot and press saute. When the oil heats up, add cashews and saute for a minute. Adding cashews is optional, but recommended.
Add jeera/cumin seeds, bay leaves, cloves, cardamom, and cinnamon, stirring constantly for a minute.
Add chopped ginger, chopped garlic, and chopped green chilies. Continue to saute for a minute.
Add onions and cook for 1-2 minutes. Or until it's translucent.
Add Garam Masala, chili powder, turmeric powder, and mix well.
Add sliced mushrooms and coconut milk and stir continually for about 30 seconds.
Add salt, soaked rice, and water. Mix well.
Press cancel. Place the lid and close the pressure-release valve. Adjust to pressure-cook on high for 5 minutes.Let the pressure release for 10 minutes naturally then do a quick release. Fluff the rice with a fork.