Kadai Paneer is a popular restaurant-style North Indian dish that pairs beautifully with naan, paratha, roti, or chapati. It is a great choice for gatherings and parties because the combination of paneer, bell pepper, onion, tomato, and aromatic spices is always satisfying.
Store-bought paneer works perfectly well, but paneer is also quite simple to make at home. I have included the homemade method below. The whey left after making paneer can be saved and used for kneading chapati or paratha dough.
Kadai Paneer
Recipe Details
Paneer Gravy / Side Dish
Punjabi / North Indian
Sashi
30 minutes
30 minutes
1 hour
2
If making the paneer from scratch, allow additional time for boiling and curdling the milk and about 30 minutes for pressing the paneer.
Ingredients
For Kadai Paneer
- Paneer – 15–20 cubes
- Onions – 2 large
- Capsicum / Bell pepper – 1
- Dried red chilies – 5
- Green chilies – 4
- Tomatoes – 5
- Ginger – 1 small piece
- Garlic – 7 cloves
- Coriander powder – 1 tsp
- Garam masala – 1/2 tsp
- Sugar – 1 tsp
- Butter – 4 tbsp, divided
- Salt – to taste
For Homemade Paneer
- Milk – 1 liter
- Lemon juice – 1/2 tsp, plus a little more only if needed to curdle the milk completely
- Curd / Plain yogurt – 2 tbsp, as an alternative to lemon juice
- Oil – 5 tbsp, for shallow-frying the paneer
Preparation
To Prepare Homemade Paneer
- Pour the milk into a heavy-bottomed saucepan and bring it to a boil.
- Reduce the heat and add the lemon juice or curd. Stir gently.
- The milk should begin separating into white curds and pale whey. If using lemon juice and the milk does not separate completely, add a little more lemon juice gradually until it does.
- Once the milk has fully curdled, remove the pan from the heat.
- Line a strainer with a clean cheesecloth or thin kitchen cloth and strain the curdled milk.
- Gather the cloth around the curds and gently press out the excess whey. Avoid squeezing excessively, which can make the paneer dry.
- Shape the paneer into a rectangular block about 1/2–1 inch thick.
- Cover it with the cloth, place a flat plate or board on top, and add a moderate weight.
- Press for about 30 minutes, or until the paneer is firm enough to cut.
- Cut the paneer into small cubes.
- Heat the oil in a pan and shallow-fry the paneer cubes briefly until lightly golden. Do not over-fry them, as the paneer should remain soft.
- Remove and keep aside.
For the Gravy
- Cut the onions and bell pepper into medium-sized pieces.
- Add the ginger, garlic, green chilies, dried red chilies, and tomatoes to a blender.
- Grind into a smooth paste and keep aside.
Cooking Instructions
- Heat 2 tablespoons butter in a wide pan over medium heat.
- Add the chopped onions and bell pepper.
- Sauté until the onion becomes soft and lightly golden while the bell pepper still retains some texture.
- Add the coriander powder and garam masala.
- Cook for about 2 minutes over medium-low heat, stirring so the spices do not burn.
- Transfer the onion and bell pepper mixture to a plate and keep aside.
- Heat the remaining 2 tablespoons butter in the same pan.
- Add the ground tomato, ginger, garlic, and chili paste.
- Add salt and sugar.
- Cook over medium heat, stirring frequently, until the tomato mixture is well cooked and the butter begins to separate around the edges.
- Add the fried paneer cubes and the sautéed onion and bell pepper mixture.
- Mix gently so the paneer is evenly coated with the masala without breaking the cubes.
- Cook over low heat for about 3–5 minutes so the flavors combine.
- Taste and adjust the salt if needed, then remove from the heat.
Tips
Store-Bought Paneer: Store-bought paneer can be used instead of making it from scratch. Cut it into cubes and use it directly, or lightly fry it if you prefer.
Keep Paneer Soft: Do not fry paneer for too long. Over-frying can make it firm and chewy.
Bell Pepper: Avoid overcooking the capsicum. A little bite and freshness work well in Kadai Paneer.
Tomato Masala: Cook the ground tomato mixture thoroughly before adding the paneer. This removes the raw tomato flavor and gives the gravy a richer taste.
Spice Level: The original recipe uses 5 dried red chilies and 4 green chilies, so it can be quite spicy. Reduce the chilies according to your preference.
Using Paneer Whey: The whey drained while making paneer can be used instead of plain water when kneading chapati or paratha dough. If not using it immediately, refrigerate it promptly in a clean covered container.
Serving Suggestion
Serve Kadai Paneer hot with naan, paratha, roti, chapati, or jeera rice.
Recipe Source: Adapted from Mallika Badrinath’s book.






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