Kadai Paneer is a popular paneer recipe where paneer and bell peppers are cooked in a spicy masala. It is one of the most popular paneer recipes. Kadai is like a wok commonly used in Indian cooking. We use it to make stir fry and all sorts of things.
This dish is called Kadai Paneer because it’s cooked in a kadai. But if you don’t have a kadai you can use a wok or any other pan.
This paneer kadai recipe gets its unique flavour from the freshly ground masala. It is called masala kadai.
Here’s all that I added to my kadai masala
• Coriander seeds • Dry red chillies • Green cardamom • Fennel seeds • Cloves
Coriander seeds and dry red chillies are the main ingredients of kadai masala. I also like to add cardamom, fennel and cloves for added flavour. The spices are dry roasted until fragrant and then ground to a fine powder. The addition of fresh spices makes this dish super flavorful.
That way you don’t have to do the extra step of making the fresh masala when making kadai paneer.
You can use this masala for any other dish you like. For example kadai vegetable or tofu. It will add so much flavour to these dishes.

Dry roast the spices for kadai masala for 3 to 4 minutes on medium heat until fragrant. Remove kadai from the heat and transfer the roasted spices to a spice grinder. Let it cool down a bit and then grind to a fine powder. Set aside. You can also make this kadai masala in advance and store it.
Paneer and Bell peppers
Kadai or any other pan, now melt butter with oil on medium heat. Add chopped onion and fry for 3 minutes until softened. Then add sliced green chilli and ginger garlic paste and fry for another 1 to 2 minutes. Then add chopped tomatoes and tomato paste. Mix and cook for around 6 minutes until the tomatoes are very soft. Then add 3 to 4 teaspoons of previously prepared masala kadai. Add garam masala and Kashmiri red chilli powder. Add half of the ginger julienne. Stir the spices and cook for 40 seconds. Then add some water and stir. Add cream, salt and sugar and mix. Cook for five minutes. Add in the paneer and bell peppers (capsicum) and mix. Crush kasuri methi and add to the pan. Serve kadai paneer with naan or paratha.