Heat oil in a large heavy saucepan over medium heat. Add mustard seeds and turmeric and cook, shaking pan, until mustard seeds pop, 1-2 minutes. Add onion, garlic, and chile and cook, stirring occasionally, until onion is translucent, about 7 minutes. Add rice and stir to coat. Add lemon peel, salt, and 3 cups water; bring to a boil. Reduce heat to low, cover, and cook until rice is tender, 20-25 minutes.
Stir in lemon juice. Cover and let stand off heat for 15 minutes. Fluff with a fork and stir in cashews.
