This kadai paneer recipe is a restaurant style gravy recipe. It is spicy, delicious and very easy to make paneer dish.

Kadai Paneer Recipe (Restaurant style Kadai Paneer Gravy)

What is Kadai Paneer?

Kadai means 'Indian wok'. This Indian wok is little similar to Chinese wok. The difference is Chinese wok has more depth. And Paneer means Indian cottage cheese. So basically, a paneer dish made in kadai called kadai paneer.

The gravy is made from onions and lots of tomatoes. Yes, tomatoes are the reason for this gravy’s bright red color.

To make it more flavorful, let’s make the kadai masala powder at home.

What is in Kadai Masala?

Kadai masala is made from coriander seeds and dried red chilies. Occasionally peppercorns, cinnamon stick, cloves, cumin seeds, and fennel seeds are also added. These whole spices are dry roasted till fragrant and then ground into powder.

When we make fresh kadai masala powder at home, it makes a huge difference in the kadai paneer gravy's flavor and taste.

Here dried red chilies make the dish spicy. If you prefer less spicy version then use Kashmiri red chilies which gives vibrant red color but makes it less spicy.

Other than using in kadai paneer recipe, this kadai masala can be used in kadai vegetables, kadai bhindi or kadai mushroom. If making these recipes on a regular basis then make the masala powder in a big batch and store in an airtight container. It stays good, fresh for 4-6 months.

Two types of Kadai Paneer Recipe:

Kadai paneer gravy: as the name says, it has gravy. I am sharing this gravy version today. The texture of the gravy is not smooth like shahi paneer or palak paneer or paneer butter masala. It is slightly chunky because of the chopped tomatoes in it.
Dry kadai paneer (Sabzi kind): To make dry kadai paneer recipe, just follow the same below method minus the water. So when you skip the water, there will be semi-dry gravy. And it will be coated to the paneer pieces.

It's all about the preferences. Choose as per your family members liking.

Main Ingredients for Restaurant style Kadai Paneer Gravy:

Paneer: Always use fresh paneer. You can use homemade paneer (by the way it is very easy to make!!). Or use the store bought paneer. In the USA, you can find in any Indian grocery stores (in the freezer section). I have seen some Costco does carry frozen paneer (Gopi brand). But I prefer the Nanak brand from Indian grocery stores.
Tomatoes: used two different ways. Once is finely chopped tomatoes which make the gravy chunky. Second is very little pureed tomatoes which adds some thickness to the gravy. Because we are using a good amount of tomatoes, I highly recommend using ripe, red tomatoes.
Bell pepper (capsicum): It adds the texture and crunch to the dish. I cooked capsicum till 80% done. Because I like crunchy bell pepper. You can cook them all the way through.

check out more restaurant style paneer recipes
Paneer do pyaza // Paneer lababdar // Paneer bhurji gravy // Paneer tikka masala

How to make kadai paneer recipe?

1) Dry roast the coriander seeds and dried chilies on medium heat. Keep stirring constantly. As it toasted you will get a nice aroma of coriander seeds. also, chilies will get darker in color. Remove it to a plate or bowl and let it cool completely.

2) Once cooled, grind into a powder using a spice grinder or coffee grinder.

3) In the same pan heat the oil on medium heat. Once hot add chopped onions. Sprinkle some salt to speed up the process.

4) Cook them till it gets translucent.

5) Add garlic paste. Alternately you use freshly grated garlic.

6) Mix and cook for 35-40 seconds. or till the raw smell goes away.

7) Add ground kadai masala.

8) Stir and saute for a minute.

9) Add chopped tomatoes and remaining salt.

10) Mix well and let it cook.

11) It will start to leave its water and will get soften. Keep mashing the soften tomatoes with the back of the spatula.

12) As it cooks, all the moisture will evaporate. it starts to leave the sides of the pan.

13) Then add pureed tomato.

14) Mix it well. Instead, you can use 2 tablespoons of store bought tomato puree for a brighter color.

15) stir in garam masala and kasoori methi.

16) Cook till again it leaves the sides. And oil should ooze out.

17) Add 1 cup of water or as required to make gravy consistency. Add capsicums. Cook for 4-5 minutes, so it gets cooked.

18) Add paneer. stir gently so paneer cubes do not break.

adding capsicum and paneer in kadai gravy

19) Finally, add cream.

20) Stir well and let comes a boil. Then turn off the gas heat. If you like to sprinkle some chopped cilantro.

adding heavy cream to kadai paneer gravy

Serving suggestion: Serve this kadai paneer gravy with paratha, naan or kulcha. Also have some kachumber salad or onion lachha (sliced onions w/ drizzle of lemon juice) on the side. Sometimes I do serve salted chaas or masala chaas on the side.

Restaurant style Kadai Paneer Gravy Recipe

Tips for BEST Restaurant style Kadai Paneer:

Remove the stems and seeds of the dried red chilies. It reduces the spiciness and also the heat from seeds is not good for your body.
For less spicy taste, please use Kashmiri red chilies.
There is no need to add additional red chili powder, as dried red chilies are enough to make it spicy. If you like more spicy than you can add some chili powder.
Always use ripe tomatoes. If using slightly unripe tomatoes then the gravy will be sour.
Once chopped tomatoes get cooked and soft, mash them with the back of the spatula. It makes a thick gravy. Otherwise, water and tomatoes stay separated. To avoid that also simmer for good 5 minutes after adding water and capsicum. When the curry is served in the plate, water is separating from the gravy and running in the plate. I hate it when this happens.

How to make Vegan Kadai Paneer Gravy?

Instead of paneer, use firm tofu.
Instead of heavy whipping cream, use 4 tablespoons of cashew paste (8-10 cashew nuts soaked in warm water and then ground into paste) OR use coconut cream (it gives slightly different taste).