Chilli Paneer

What is Paneer?

Paneer is a fresh cheese made from cow or buffalo milk that's commonly used in Indian cooking. The cheese is non-melting and has an almost meaty texture that makes it perfect for vegan and vegetarian dishes.

One of my favorite ways to cook paneer is in Chilli Paneer: battered and fried, and tossed into a salty, spicy, sweet sauce with some crisp-tender veggies.

I like to serve Chilli Paneer over Indian Rice, but you can use plain white rice, preferably basmati rice, if you prefer.

Ingredients Needed to Prepare this Recipe

• Paneer. I used Gopi Paneer. It was creamy and delicious and maintained its shape when cut and during cooking.
• Red chilli powder. My favorite kind of chili powder to use in Asian and Indian dishes is Kashmiri Chilli Powder. But, you really can use whatever chili powder you like in this recipe and it will be fabulous.
• Cornstarch is used both in the breading for the paneer and to thicken the sauce
• All-purpose flour, for the paneer breading.
• Salt and pepper.
• Vegetable or canola oil. You'll need enough oil to fill a skillet with about an inch of oil. This is more oil than what is used in most chilli paneer recipes for the simple reason that more oil means you don't have to turn the paneer as often while it cooks.
• Soy sauce. If you're sensitive to salt, use low sodium soy sauce. And, if you want this dish to be gluten free, use coconut aminos or tamari instead. (Also, leave the flour out of the breading and use only cornstarch.)
• Rice vinegar. It's important to use unseasoned rice vinegar in this dish. 
• Red and/or green chili sauce. I really like to use both red and green chili sauce in this dish because the combination creates a more complex and, in my opinion, well-balanced sauce. But, if you prefer, you can use all of one or the other. It is important to use an Indian Style Chili sauce. I used Maya Kaimal.
• Ketchup. The first time I made Chilli Paneer I was skeptical about useing ketchup in the sauce. What I found is that just a few tablespoons of ketchup adds a slight sweet tanginess that is essential to balance out the spicy and savory flavors.
• Vegetables: There are a couple different styles of chilli paneer and not all of them include vegetables. But, I really like them in there. So, for this recipe I used red onion, bell peppers, fresh ginger, garlic and green chilies.
• Green onions. Sprinkle a few chopped green onions over bowlfuls of chilli paneer for a touch of extra color and flavor.

*See recipe card for precise quantities.

How to Make Chilli Paneer

Making Chilli Paneer is basically a 3 step process:

1. Batter and fry the paneer
2. Cook some veggies
3. Mix up the sauce and use it to coat the fried paneer and the veggies

Make the batter by whisking cornstarch, flour, chili powder, salt, and pepper with water. Cut the paneer into 1-inch pieces and toss it around in the batter to coat.

Heat about an inch of oil in a skillet until very hot - about 360-370° F (182-187° C). Add the paneer in batches and cook until golden grown on all side. Let the fried paneer rest on a paper towel lined plate while you prepare the vegetables and sauce.

Mix the soy sauce, rice vinegar, chili sauce, and ketchup in a small bowl or measuring cup.

Mix the cornstarch and water in a separate bowl. Set both near the stovetop.

Pour the soy sauce mixture into the skillet and bring it to a boil. Then, whisk in the cornstarch slurry and cook, stirring constantly, until the sauce thickens.

Pour out all but about 3 tablespoons of oil from the skillet and return it to medium heat. Cook the onion for a couple of minutes then add the bell peppers, ginger, garlic, and green chilies, and cook for a couple of minutes longer. 

Add the paneer to the skillet and stir everything around to coat it in the sauce.

Serve Chilli Paneer over Indian Rice (or any kind of cooked rice) with a sprinkle of chopped green onions.

Helpful Tips and Tricks

#1. Placing the paneer in water will keep it from drying out.

As you cut the paneer into cubes, add it to a bowl of room temperature water to keep it from drying out. Paneer will keep well in water for up to 4 days as long as you change the water every day. So, once the panner is cut and in the water, there's no need to rush.

#2. Add only as much water as you need to the paneer batter.

The consistency of the paneer batter should be similar to pancake batter. You want it to be thick enough to really stick to the panner without being so thick that it's difficult to move the paneer around in the batter.

#3. Don't worry about pieces of panner getting stuck together in the pan while frying.

The batter is very sticky and some of the pieces of paneer will stick together as you lower them into the hot oil. Don’t sweat it. Separate them as you can and don't worry about the ones that stick together. You can separate them after they are done cooking.

In fact, having some of them sticking together makes them easier to turn.

#4. For easy frying, use more oil, not less.

Most Chilli Paneer recipes call for a very thin layer of oil in the pan for frying the paneer. But using more oil means you don't have to turn the pieces as often. With about an inch of oil in the pan, the oil cooks the bottom and sides of the cubes of paneer at the same time. This means you only have to turn them once instead of multiple times.

Does using more oil in the pan make the paneer more oily? No. The battered panner will absorb the same amount of oil whether you use a little or a lot.

And, by the way, even though the battered paneer are fried, they don't taste oily at all.

Substitutions and Variations

• If you want the Chilli Paneer sauce to be less sweet, use tomato paste instead of ketchup. Because tomato paste is more concentrated than ketchup, use half as much - 1 ½ tablespoons for this recipe.
• Use any kind of vegetables you like in this recipe. Chilli Paneer is delicious with any kind of vegetables - sliced carrots, broccoli, cauliflower, zucchini, and asparagus, just to name a few good options. The most important thing is to not overcook the vegetables. This dish is most delicious when the vegetables are crisp-tender.
• Use any kind of chili powder. My favorite kind of chili powder to use in Asian and Indian dishes is Kashmiri Chilli Powder, so I tend to always have some on hand. But, using other kinds of chili powder will not drastically affect the flavors in this dish. So, feel free to use whatever you have or whatever you want.
• Swap out the red and/or green chili sauce. If you want to keep the Indo-Chinese flavor of this dish, it is important to use an Indian Style Chili sauce. I used Maya Kaimal. But, that's not to say that you can't alter the flavor of the sauce by using a completely different chili sauce or hot sauce.
• Make this dish more spicy! Increase the heat of the Chilli Paneer sauce by adding more chilli sauce or adding some chilli powder to the soy sauce mixture when you make the sauce. You can also make this dish more spicy by adding diced hot chilies to the skillet along with the vegetables.

Chilli Paneer FAQs