Paneer Capsicum Masala

Paneer Capsicum Masala

Paneer is one of the favorite vegetarian curries at the restaurants. This Indian version of cottage cheese is full of protein. It is a different story that the rich and heavy gravy they prepare at the restaurants almost negates the health benefits. I have tried making restaurant style paneer curry at home many times and this recipe comes closest. For me paneer and capsicum are the best combination. Fresh paneer and capsicum are key to a yummy curry.

I do not get fresh paneer here and I rely on frozen paneer when I have guests at home. Put the frozen paneer in hot water for 3-5 minutes and you have soft paneer ready to cook. Now comes the tricky part. Restaurant style gravy but in a slightly healthier version. I leave out the butter for sure. Second substitution I make is, to reduce the quantity of cashew nuts to half and add melon seeds.

I prepare the gravy in advance and freeze it in batches. Every time I want to cook paneer ki sabji, I just take one batch of gravy and defrost it and cook it with panner and the vegetables of my choice. I have the curry ready in minutes.

This curry can be served with hot roti, naan, or with jeera rice. Do not forget fresh cut or pickled onions and some fresh non spicy green chillies.

Paneer Capsicum Masala


Serves 4

  • 1 ½ cup paneer
  • 1 cup mixed bell peppers chopped into square medium sized pieces
  • 1 small onion chopped

For Gravy

  • 1 big tomato roughly chopped
  • 1 small onion roughly  chopped
  • 20-22 cashew nuts
  • 3 inch piece of ginger chopped
  • 4 cloves of roughly garlic
  • 1 green chilli
  • 2 tbsp melon seeds
  • 1 ½ tbsp kasoori methi
  • 3 tsp chilli powder
  • 1-2 tbsp fresh cream (optional)
  • ¼ tsp turmeric powder
  • ¼ tsp cumin seeds
  • 4 tbsp oil


Heat 3 tbsp oil in a kadhai or a deep pan. Add green chilli, ginger, and garlic. Once the garlic is lightly browned, add onions and saute. Cook till onions are translucent. Add cashews and melon seeds and cook till the cashews are lightly browned sauteing in between. Add the tomatoes, salt, and red chilli powder and mix well. Cook till oil separates and tomatoes are mushy (2-3 minutes). Switch off the gas and let this mixture cool. Once it is cool, grind this to a fine paste and keep aside.

You can store this gravy in the freezer for future use too.

Heat 1 tbsp oil in a kadhai or thick bottomed pan. Add cumin seeds. Once the seeds pop, add onions and cook till they are translucent. Add bell pepper and cook for 1-2 minutes. Add paneer and sauté for 1-2 minutes. Add the gravy and mix well. Add little water if the gravy is too thick. Cook for 3-4 minutes or till oil separates. Garnish with fresh cream and chopped coriander and serve with hot rotis or rice.

2 thoughts on “Paneer Capsicum Masala

  1. Looks really yummy. I will try this. I usually make a slightly modified, less calorific version by microwaving the onion, tomatoes etc., and using only watermelon seeds for matar paneer. It does not, of course, come out as creamy as with cashews. 😐



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