In a mini food processor or blender combine the coconut, cashews, poppy seeds, and 1/3 cup water. Grind thoroughly to form a smooth paste like pesto. (A mini processor works best for this.) Set aside.
In a wide deep pan heat 3 tablespoons of the oil over medium-high heat. Fry 1 cup of the shallots until light brown. Stir in the garlic, ginger, green chili, and fry for 1 minute. Add the tomato, 3 tablespoons cilantro, ground masala, garam masala, salt, and 1/2 cup water; fry until the tomato breaks down and forms a paste.
Add the yogurt and stir until it dissolves. Add the chicken and bring to a boil. Reduce the heat to medium-low, cover, and simmer for 30 minutes, until the chicken is cooked through.
Fry the remaining 1/2 cup shallots in the remaining 2 tablespoons oil until very brown and crisp. Remove them to a plate.
Add the coconut and cashew paste to the chicken and simmer for 10 more minutes. Check the salt.
Place the star anise in a coffee grinder and grind to a fine powder. Measure out 2 teaspoonfuls, reserving the rest for another use.
Grind the fennel seeds in the coffee grinder to form a fine powder.
Combine all the ingredients and store in an airtight jar away from the light. It will keep for 6 months.
Recipe courtesy of Savoring the Spice Coast of India, Maya Kaimal, HarperCollins