Kadai Paneer

Course: Main Course
Cuisine: Indian, North Indian
Keyword: Kadhai Paneer, Paneer, Veg Gravy, Vegetarian
Author: Maria Jose Martin
Paneer and Bell pepper cooked in a rich & spicy sauce. This restaurant-style paneer dish is packed with flavors & goes well with rice & roti.
Print Recipe


  • 200 - 250 gms Paneer
  • 2 medium - large Onion cubed
  • 1/2 tbsp Chopped garlic
  • 1 Chopped green chilli
  • 2 medium Tomayo cubed
  • 1 large Onion cubed
  • 1 small - medium Capsicum cubed
  • 1.5 - 2 tsp Kashmiri chilli powder
  • 2 tsp Coriander powder
  • 1/2 tsp Turmeric powder
  • 1/2 tsp Cumin powder
  • 1/2 tsp Garam masala
  • 1/2 tbsp Kasuri methi
  • 1/2 - 1 tsp Sugar
  • 50 ml Milk I used full fat milk
  • 50 ml Water
  • Salt
  • 1/2 tbsp + 2 tsp Ghee refer notes


  • Heat 1/2 tbsp ghee/oil in a wide and deep pan. Add cubed 2 med-large onion and chopped garlic and green chilli. Cook till it browns.
  • Add cubed tomato and cook till it softens and becomes mushy. Check out Paneer Peas Masala
  • Let the onion - tomato paste cool a bit. Add 2-3 tbsp water to this and grind to a smooth paste.
  • In the same pan (without cleaning), add 2 tsp ghee. Add cubed 1 large onion and cubed capsicum. Cook for 4-5 mins on low flame.
  • Add the ground paste, mix well and add all the spice powders (Kashmiri chilli, coriander, turmeric, cumin, and garam masala) and salt. Cook for 3-4 mins, till the oil, starts appearing.
  • Combine 50 ml milk and 50 ml water. Add this to the curry and mix well. Check out Paneer Pepper Masala
  • Add Kasuri methi and sugar. mix well.
  • Add paneer pieces, mix well. Cover and cook on low flame for 3-5 mins, till the paneer pieces, are coated well with the masala. check to season and add more salt/sugar to balance the flavors.
  • Let the curry rest for 10 mins or so, for the flavors to settle in.


Though you can use oil to cook this dish, I recommend using ghee for a rich taste and flavor. 
The curry has a semi dry consistency and the curry tends to thicken as it rests, so adjust the qty of gravy accordingly. You can increase/reduce the qty of milk+water, to adjsut the gravy consistency.
If you prefer a creamier version, add 1/2 - 1 tbsp of chopped cashew nuts along with the tomatoes. 
If you dont like Paneer, you can use Potatoes or Mushrooms or Chicken.