Punjabi Shahi Paneer Recipe (Restaurant Style)

Shahi Paneer is a royal North Indian dish consisting of soft paneer in a creamy tomato onion nut-based gravy flavored with aromatic spices. It is rich, creamy, and flavorful! Serve Mughlai Shahi Paneer with some butter naan or rice for a delicious meal. 

I am sharing how to make an easy Restaurant-style shahi paneer recipe using Instant Pot and stovetop.

Wondering what to make for your next party? Try this Shahi Paneer recipe! It's easy to make, delicious, and much better than the one served at restaurants.

It's a rich, mildly spicy gravy with hints of sweetness making it perfect for a crowd. Its delicious with Naan or rice.

If you love paneer recipes, try the Kadai Paneer and Palak Paneer recipes!

Jump to:

• What is Shahi Paneer?
• My Recipe
• Recipe Ingredients
• How To Make Shahi Paneer (Stepwise Photos)
• Serving Suggestions 
• Recipe Tips
• Frequently Asked Questions 
• More Paneer Recipes
• Recipe Card

What is Shahi Paneer?

Shahi Paneer is a popular North Indian dish from Mughlai cuisine where paneer (Indian cottage cheese) is cooked in a rich creamy gravy.

The term "Shahi" translates to "royal" and so Shahi paneer is believed to have originated in the royal kitchens of North India, particularly during the Mughal era.

Over time, this Mughlai Shahi Paneer has become a popular dish in Indian cuisine, served in many restaurants worldwide. It is mildy sweet, creamy, rich, and extremely delicious!

There are a couple of variations of Shahi paneer curry, one with tomatoes (a red gravy) and one without tomatoes and with onions only (white gravy).

The red gravy of shahi paneer may look very similar to paneer butter masala but both have different flavor profiles.

My Recipe

This recipe for shahi paneer is made with tomatoes, onions, cream, nuts, saffron, and a mix of aromatic spices like the Punjabi shahi paneer served at restaurants. It is perfect for special occasions or special meals.

Unlike the traditional shahi paneer where you boil the onion nut mixture and then cook the onion paste, I cook the shahi paneer masala in the Instant Pot.

The advantage of making Instant Pot shahi paneer is you can add all the gravy ingredients in one go and dont have to babysit it.

Once the onion tomato mixture is cooked blend to a smooth paste and for the final touches cook with cream and spices.

I dont use yogurt in this recipe as the tang from tomatoes is sufficient. If you prefer more tangy, add ¼ to ½ teaspoon of amchur (dry mango powder) with garam masala.

This gravy is mildly spicy with hints of sweetness, creamy, flavorful and aromatic. You can make it ahead and store it in the fridge. It's gluten-free and vegetarian.

Before serving, simmer soft paneer cubes (or triangles) in the gravy for a few minutes to make the best shahi paneer at home.

Recipe Ingredients

Paneer - also known as Indian cottage cheese. You can use fresh homemade paneer or store-bought fresh or frozen paneer which is readily available in most Indian grocery stores. For frozen paneer, thaw it to room temperature then soak it in hot water until soft.

Whole spices - bay leaf, cumin seeds, cloves, green cardamom, black cardamom, cinnamon and whole black pepper. You can find all these on Amazon or in Indian grocery stores.

Aromatics - The trio - ginger, garlic, and green chili. Use fresh for the best flavor.

Onion - I use yellow onion. It adds sweetness and depth of flavor to the gravy.

Tomatoes - Use fresh tomatoes (using roma tomatoes) roughly chopped.

Spices - I use basic Indian spices like turmeric, coriander powder, Kashmiri red chili powder, Punjabi garam masala, and salt. I recommend adding the homemade Punjabi Garam Masala since it adds great flavor.

Saffron - a few saffron strands impart its unique color, aroma, and flavor to the dish, enhancing its richness.

Cashew - I have used cashews to give this curry a rich restaurant-style taste but you can skip cashews to keep the curry nut free. Alternatively, you can use almonds, poppy seeds, melon seeds, or a mix of these. Soak almonds in hot water, peel the skin, and then use.

Cream - This is the creamy Mughlai shahi paneer recipe so I add heavy cream (or fresh cream) towards the end. You can use milk or hallf and half to make it without cream.

Herbs - I've used dried fenugreek leaves (Kasuri methi) often used in Punjabi recipes for their unique flavor and taste, and last but not least cilantro for garnish. 

Please refer to the recipe card for exact measurements of ingredients. 

How To Make Shahi Paneer (Stepwise Photos)

Soak paneer in hot water for 15-20 mins or until soft. Drain the water and cut paneer into cubes or triangles. Keep in warm water until ready to use.

Making Shahi Paneer Masala in Instant Pot

1 - Start the Instant Pot on saute mode. Add oil and ghee followed by whole spices. Saute whole spices until they turn fragrant.

2 - Add onion, ginger, garlic, green chili, and cilantro stems. Saute for a minute until the onions start to turn soft.

3 - Stir in the tomatoes, cashews, salt, and ¾ cup water. Deglaze the bottom. Mix well and ensure nothing is sticking to the bottom of the pan.

4 - Close the lid, move the vent to the sealing position, press the manual or pressure cook button, and cook on high pressure for 8 minutes.

Once the pressure cooking is complete, let the steam release naturally. Then open the lid.

Note: You can also cook this shahi paneer masala in a pan on the stovetop, until the onion, and tomatoes are soft and the raw smell is gone.

Making Shahi Paneer

5 - Allow the mixture to cool. Remove bay leaf and transfer the cooked mixture to a blender to make a smooth puree, strain it (optional I didn't). 

You can finish the rest of the recipe in Instant Pot or on the stovetop in a pan. I prefer the latter.

6 - Heat a pan on the stovetop on medium heat (or start the Instant Pot on saute). Add butter, followed by bay leaf (picked out earlier).

Once the butter is melted, add in the spices (turmeric, red chili powder, and coriander powder). Saute for a few seconds. Ensure the spices dont burn.

7 - Add the onion-tomato puree and mix until well combined.

8 and 9 - Stir in the cream, garam masala, and kasuri methi (crushed between your palms). Mix well till combined and bring the gravy to a simmer.

10 - Stir in sugar and pinch of saffron strands. Mix well and simmer for 2-3 minutes.

Taste test for salt and adjust if needed. Add ½ to ¾ cup of water (or as needed) to adjust the gravy consistency.

11 - Drain the water and add soft paneer to the gravy. Simmer for 5 mins. For fried paneer, cook for 1-2 minutes only. Turn off the heat.

12 - Finally add cilantro and Shahi Paneer is ready to serve!

Serving Suggestions 

Serve Shahi Paneer hot drizzled with more cream, a sprinkle of saffron, pinch of cardamom powder (optional) and cilantro for garnish.

It pairs well with roti, naan, paratha, basmati rice, or jeera rice. Add a side of Boondi Raita, or kachumber(salad) for a wholesome meal.

Recipe Tips

For store-bought paneer, soak it in hot water for 15-20 minutes to soften it. For homemade paneer, ensure it is well-drained and pressed to avoid excess moisture.

Before adding it to gravy, you can saute the paneer in butter for a restaurant-style shahi paneer recipe. I skipped this step and directly cooked paneer in the gravy. 

Dont cook paneer for too long or else it will get chewy. Just simmer in the curry for a few minutes to keep it soft.

Adjust the quantity of spices according to your taste preferences but dont skimp on the garam masala or whole spices.

Tender cilantro steams add a great dept of flavor to the curry so highly recommend you add if you have them.

Instead of pressure cooking the shahi paneer gravy in the Instant Pot, you can also make it on the stovetop. Saute and cook until the onion and tomatoes are cooked and soft before making the puree.

Add boiled green peas along with paneer to make shahi matar paneer.

To make shahi paneer recipe without cream, use milk or half and half instead. It will be less creamy but still deliciuos.

Use cashew cream and tofu to make this vegan

Frequently Asked Questions 

More Paneer Recipes

I hope you enjoy this Shahi Paneer Recipe !! If you try this recipe, please rate it by clicking stars ⭐️ on the recipe card. Thank you ❤️! You can also follow me on Facebook and Instagram to see what's cooking in my kitchen!!

Recipe Card

Update Notes: This post was originally published on Sep 23, 2012, but was republished with, step-by-step instructions, new photos, tips, and a video in April of 2024.