Kadai Paneer is a popular Indian paneer dish made with paneer (Indian cottage cheese), onions, and bell peppers cooked in a spicy onion tomato gravy flavored with freshly ground Kadai masala. This Punjabi-style Kadai Paneer recipe is a famous side dish in Indian restaurants and is best served with roti, naan, or jeera rice.
In a small pan or wok, add the whole spices for Kadai masala and dry roast on low heat for 3-4 mins until fragrant.
Remove the pan from heat and transfer the spices to the grinder.
Allow the spices to cool and then grind to a fine powder. Keep aside.
You can make this Kadai masala in advance and store it in an air-tight container.
Sauté paneer, onions, and bell pepper
In a kadhai (wok) or pan, heat 1 tablespoon of oil or butter and add the onions and bell pepper.
Saute on high heat for 1-2 minutes or until the veggies turn bright and lightly roasted yet crunchy. Do not overcook. Remove on a plate and keep aside.
In the same pan, heat one more tablespoon of oil or butter. Add the paneer, and ¼ teaspoon of salt and saute paneer for 1 minute on each side. You don't have to brown the paneer. Do not overcook the paneer or else it will get hard.
Remove on a plate with the onions and bell peppers. Keep aside.
Make Kadai Paneer (stove top)
In the same wok (or pan), heat oil on medium heat and saute onions until lightly golden.
Stir in ginger and garlic paste and saute until the garlic smell goes.
Add the tomatoes and 1 teaspoon salt, and mix well. Cover and cook until the tomatoes are soft about 3-4 minutes. Mix intermittently to prevent tomatoes from sticking.
Stir in the tomato paste, green chili, red chili powder, garam masala, and kadai masala.
Cook until this onion tomato masala reduces in size and the oil starts separating from the sides.
Stir in ½-1 cup of water (to adjust consistency) and bring it to a simmer. Start with half cup and then add more if needed.
Add the sautéed bell peppers, onion, and paneer. Mix and cook for 2 minutes or until the mixture starts simmering.
Crush some Kasuri methi between your palms and add it along with cream, and ginger juliennes. Mix and cook for another 2-3 minutes on medium-low heat.
Garnish with cilantro and ginger juliennes. Kadai Paneer is ready to serve.
Instant Pot Kadai Paneer
Start Instant pot on saute and dry roast the spices and grind to a powder.
Similarly saute the onions, bell pepper, and paneer in butter or oil for 1-2 minutes. Remove them to a plate.
Now add remaining oil and let it heat up. Add in your onions, ginger garlic paste and saute for a minute.
Then stir in the tomatoes, tomato paste, green chili, salt and spices. Saute for another 1-2 minutes.
Add half a cup of water, deglaze the pot, close the lid with went to sealing and pressure cook for 5 minutes on high pressure. Once cooking completes, do a quick release.
At this point, you can puree the onion-tomato masala for smoother gravy if required.
Start Instant pot back on saute and add your sauteed onions, bell pepper, and paneer, cook for two minutes.
Add the crushed Kasuri methi, cream, ginger juliennes, and cilantro. Mix well and turn off the Instant Pot.
Instant Pot Kadai paneer is ready to serve.
Use good quality paneer. If possible use homemade paneer but store-bought (fresh or frozen) works just fine too. Just soak it in hot water for 20-30 mins until soft. Homemade freshly ground Kadai Masala powder is key to a delicious and flavorful Kadai Paneer. Highly recommend making it at home vs buying the store-bought one. You can make it in bulk and store it in an airtight container. You can control the spice level in kadai paneer with the amount of dry red chilies in the Kadai masala. More chilies equal more spicy. I recommend using Kashmiri red chilies as they are mild and give a beautiful orange-red color to the gravy. Alternately use any dry Indian red chilies with low to medium heat. For a smoky flavored Kadai Paneer, use the dungar method. I usually skip it and simply sauté the onion and bell peppers on high heat which infuses some smoky flavor. Use store-bought tomato puree for even vibrant-looking curry. If using fresh tomatoes, add tomato paste for that flavor and color boost. Last but not least, don't forget the ginger juliennes. It really brings the dish together and makes it taste just like the ones served at restaurants.