Soak poppy seeds: In a small bowl, soak the poppy seeds in warm water for at least 20 minutes. Drain and transfer the soaked seeds to a blender or mortar. Add one chopped green chili (if using) and a splash of water, then grind to a smooth, creamy paste.
Heat the oil: In a heavy-bottomed pan or kadai, heat the mustard oil over medium heat until it just begins to smoke. This step is important to mellow the raw pungency of mustard oil. Carefully add the nigella seeds (kalonji) and the slit green chilies. Fry them for 5–10 seconds until fragrant.
Add potatoes: Add the cubed potatoes and a generous pinch of salt. Stir to coat all the pieces in the oil and spices, then cook for about 5 minutes, stirring occasionally. The potato edges should sizzle and turn lightly golden.
Spice and cover: Sprinkle in the turmeric and stir again. Cover the pan and let the potatoes cook for another 5 minutes. This helps the potatoes become tender without browning too much.
Add poppy paste: Uncover and pour in the ground poppy seed paste. Stir well so every potato piece is coated in the creamy paste. Add about ½ cup of water and mix in more salt to taste. The mixture should be just saucy enough to simmer into a thick gravy.
Simmer: Cover again and lower the heat. Let the Aloo Posto simmer for 10–15 minutes, or until the potatoes are fork-tender. Stir once or twice during this time, and if the sauce becomes too dry, add a little more water. You’re aiming for a rich gravy that clings to the potatoes.
Finish: Uncover and let any excess water evaporate so the sauce thickens. To balance the mustard-oil bite, sprinkle in a pinch of sugar and add more chopped chilies if you like extra heat, then simmer uncovered for another minute or two. Turn off the heat.
Garnish and serve: Garnish with chopped cilantro and a final drizzle of mustard oil or a squeeze of lemon if you like. Serve the Aloo Posto hot.