Tie a clean muslin cloth or cheese cloth over the rim of a large bowl or pot. Pour the yoghurt in and let the whey drain for a few hours. Press the yoghurt firmly to release any excess liquid. You should have very thick yoghurt in the cloth. Transfer the yoghurt carefully into a clean bowl.
Soak the saffron threads in the warm milk for 10 minutes. Add to the yoghurt. Now add the sugar, pistachio nuts, and cardamom powder and mix well. If you want, add some food colouring a drop at a time till you get the colour you want.
Refrigerate the shrikhand till it is completely chilled. Serve cold.