Preheat oven to 300 degrees F or 150 degress C.
In a mixing bowl, combine powdered sugar (little at a time) with the softened butter until mixture is light and creamy.
Add Nutmeg Powder and Cardamom Powder and mix well.
In a separate bowl, sift All Purpose Flour with Baking Powder and Salt.
Combine Flour mixture (little at a time) with Butter Mixture to form a soft dough.
Wrap dough in plastic wrap and let it rest for 15-20 minutes.
Knead dough once again and divide into 12 equal portions.
Roll each portion into a smooth ball with no cracks and place on a cookie sheet lined with wax/parchment paper or lightly greased foil. Leave ample space between dough balls.
Bake on the middle rack for 22-25 minutes (keep a close eye nan khatai should remain white).
Remove from oven and let the nan khatai cool for 5 minutes before transferring to a cooling rack to cool completely before eating.
Store in an air tight container at room temperature.