Paneer Capsicum Masala Recipe – Authentic Indian Gravy with Kasuri Methi

Last Updated on 2 months by Neha Deshmukh

Paneer Capsicum Masala Recipe – Authentic Indian Gravy with Kasuri Methi

Introduction

There’s just something so comforting about a warm, flavorful paneer curry, isn’t there? This Paneer Capsicum Masala is one of those dishes that always hits the spot. I first made this for a family get-together, and it was an instant hit – everyone raved about the rich, creamy gravy and the perfectly balanced spices. It’s become a regular in my kitchen, and I’m so excited to share it with you! It’s a little bit of effort, but trust me, the results are so worth it.

Why You’ll Love This Recipe

This isn’t just another paneer dish. It’s a beautiful blend of textures and flavors. The soft paneer and slightly crisp capsicum swim in a luscious, aromatic gravy. The secret? A generous helping of whole spices, a touch of kasuri methi for that authentic smoky flavor, and a creamy finish that will leave you wanting more. Plus, it’s surprisingly versatile – perfect for a weeknight dinner or a special occasion.

Ingredients

Here’s what you’ll need to create this delicious Paneer Capsicum Masala:

• 1 tbsp Butter
• 15 Paneer cubes (approx. 200g)
• 10 Capsicum cubes (approx. 150g)
• 1 tsp Cumin seeds
• 1 tsp Coriander seeds
• ½ tsp Black pepper
• ½ tsp Fennel seeds
• 1 Bay leaf
• 4 Cloves
• 1 inch Cinnamon stick
• 3 Cardamom pods
• 1 tsp Kasuri Methi (dried fenugreek leaves)
• 1 Onion, finely chopped
• 2 tbsp Mint leaves, chopped
• 1 tsp Ginger-garlic paste
• 4 tbsp Coriander leaves, chopped
• ½ tsp Turmeric powder
• 1 tsp Kashmiri red chili powder (adjust to taste)
• 1 tsp Salt (or to taste)
• 1 Tomato, finely chopped
• 2 tbsp Curd (plain yogurt)
• 2 tbsp Cashew paste
• 1 cup Water (240ml)
• 2 tbsp Cream
• ½ tsp Garam masala

Ingredient Notes

Let’s talk ingredients! A few things will really elevate this dish:

• Kasuri Methi: This is a must! It adds a unique smoky aroma and flavor that’s essential for an authentic Indian taste. You can find it at most Indian grocery stores, or online. Don’t skip it!
• Kashmiri Red Chili Powder: This isn’t just about heat; it’s about color! Kashmiri chili powder gives the gravy a beautiful, vibrant red hue without making it overly spicy.
• Whole Spices: We’re building flavor from the ground up here. Toasting those cumin, coriander, pepper, fennel, bay leaf, cloves, cinnamon, and cardamom really unlocks their aromas. It makes a huge difference!
• Paneer: Use fresh, soft paneer for the best texture. If using frozen, thaw it completely and gently pat it dry before using.

Step-By-Step Instructions

Alright, let’s get cooking!

1. First, let’s roast the paneer. Heat the butter in a pan and gently roast the paneer cubes until they’re golden brown on all sides. Set them aside – we’ll add them back in later.
2. In the same pan, add the capsicum cubes and sauté until they’re slightly blistered and tender-crisp. Remove and set aside with the paneer.
3. Now for the magic! In the same pan, add the cumin seeds, bay leaf, cloves, cinnamon stick, cardamom pods, and kasuri methi. Let them temper for about 30 seconds, until fragrant.
4. Add the chopped onion, ginger-garlic paste, mint leaves, and coriander leaves. Sauté until the onions turn a beautiful golden brown – this is where patience pays off!
5. While the onions are sautéing, let’s make our spice blend. Dry roast the cumin seeds, coriander seeds, black pepper, and fennel seeds in a separate pan until fragrant. Let them cool slightly, then grind them to a coarse powder.
6. Add the spice powder, turmeric powder, Kashmiri red chili powder, and salt to the onion mixture. Sauté for another minute or two, until everything is nicely combined and aromatic.
7. Now, add the chopped tomato and cook until it becomes mushy and soft. Stir in the curd and cashew paste. Cook until the oil starts to separate from the gravy – this is a sign that the flavors are melding together beautifully.
8. Pour in the water to adjust the gravy consistency to your liking. Add the roasted paneer and capsicum. Gently simmer for about 5 minutes, allowing the flavors to infuse.
9. Finally, sprinkle in the garam masala and garnish with fresh coriander leaves. Serve hot with roti or naan!

Expert Tips

• Don’t overcrowd the pan when roasting the paneer and capsicum. Work in batches if necessary.
• Adjust the amount of chili powder to suit your spice preference.
• For a richer gravy, use full-fat curd and cream.
• The cashew paste adds a lovely creaminess and subtle sweetness.

Variations

• My friend, Priya, loves adding peas to this dish! About a half cup of frozen peas tossed in during the last few minutes of simmering adds a lovely sweetness and color.
• For a tangier flavor, a squeeze of lemon juice at the end works wonders.
• My family often adds a potato cut into cubes along with the capsicum.

Vegan Adaptation

Want to make this vegan? No problem!

• Substitute the paneer with firm or extra-firm tofu, pressed to remove excess water and cubed.
• Replace the butter with a plant-based butter or oil.
• Use plant-based yogurt and cream.

Gluten-Free Adaptation

This recipe is naturally gluten-free! Just double-check that your garam masala doesn’t contain any gluten-containing ingredients.

Spice Level Adjustment (Mild to Spicy)

• Mild: Reduce the Kashmiri red chili powder to ½ tsp or omit it altogether.
• Spicy: Add a pinch of cayenne pepper or increase the Kashmiri red chili powder to 1.5 tsp.

Festival Adaptations (Navratri, Diwali)

This dish is perfect for festive occasions! It’s rich, flavorful, and satisfying. During Navratri, ensure you skip the onion and garlic for a vrat-friendly version.

Serving Suggestions

Serve this Paneer Capsicum Masala hot with:

• Roti (Indian flatbread)
• Naan (leavened bread)
• Steamed rice
• A side of raita (yogurt dip)

Storage Instructions

• Leftovers can be stored in an airtight container in the refrigerator for up to 3 days.
• Reheat gently on the stovetop or in the microwave. You may need to add a splash of water to loosen the gravy.

FAQs

• What type of paneer works best for this recipe? Fresh, soft paneer is ideal. If using frozen, make sure it’s completely thawed and patted dry.
• Can I make this dish ahead of time? Yes, you can make the gravy ahead of time and store it in the refrigerator. Add the paneer and capsicum just before serving.
• How can I adjust the thickness of the gravy? Add more water for a thinner gravy, or simmer for longer to reduce it and make it thicker.
• What is Kasuri Methi and where can I find it? Kasuri Methi is dried fenugreek leaves. It adds a unique smoky flavor. You can find it at most Indian grocery stores or online.
• Can I use store-bought cashew paste? Yes, absolutely! It’s a great time-saver. Just make sure it’s smooth and creamy.