Restaurant Style Chili Paneer

This Restaurant Style Chili Paneer recipe is made with chunky cubes of paneer, fresh peppers, onions, and loads of spices. It is a great indo-chinese dish for a quick, easy, and flavorful meal! My homemade version uses an air fryer to cook the paneer which is a healthier alternative to store-bought chili paneer and delivers an irresistible balance of sweet and salty flavours. Plus, using the air fryer makes it a lighter option without compromising on taste.

  • This chili paneer recipe is a healthier alternative to traditional chili paneer since it cooks the paneer in an air fryer. I find that air frying the paneer still gives you the same crispy texture without the extra oil from deep frying. Making it at home allows you to customize the dish by adding a variety of bell peppers and adjusting the sauce thickness to your preference.
  • Chili Paneer is a versatile, vegetarian-friendly dish that can be enjoyed as a flavorful appetizer or served as a main course. This popular Indo-Chinese recipe not only delivers bold flavours but is also packed with protein, thanks to the paneer.

Ingredients

  • Paneer: Use store-bought paneer or you can make your own. Just cut the paneer into 1 inch cubes.
  • Yogurt: Either curd or yogurt will work as they will keep the paneer moist and add a slight tang. You can also use high-protein or low-fat yogurt.
  • Gram flour (besan): I use gram flour to thicken the batter and ensure that the paneer crisps up in the air fryer. If you don’t have besan, you can use cornstarch or all-purpose flour as alternatives.
  • Spices: I love adding spices to the batter to avoid having tasteless paneer. For this recipe, you will need Kashmiri chili powder, salt, dried fenugreek, and turmeric for color.
  • Oil: extra virgin olive oil will work.
  • Water: helps thin out the batter.
  • Sauces: This recipe calls for sambal olek, rice vinegar, ketchup, low-sodium soy sauce, and honey for sweetness. Sambal olek can be replaced with sriracha.
  • Ginger and garlic paste: I use store-bought ginger garlic paste, but you can definitely use fresh ginger and garlic.
  • Onion: You will need one red onion.
  • Bell pepper: Use a mix of red and green bell peppers but you can choose only green peppers for a more traditional look.

How to Make Chili Paneer (Step-By-Step Instructions)

Steps 1 and 2: In a bowl, combine besan, yogurt, oil, paprika, turmeric, salt, fenugreek, and water. Whisk the mixture until it forms a smooth paste. If the batter feels too thick, gradually add more water until it reaches a consistency similar to pancake batter.

Steps 3 and 4: Add the cubed paneer to the bowl and toss until fully coated in the marinade. Let it sit for 15 to 30 minutes to allow the flavors to absorb. Arrange the paneer cubes evenly in the air fryer basket, set the temperature to 375°F, and cook for 8 to 10 minutes, or until the paneer is crispy and golden brown.

Steps 5 and 6: Chop the bell peppers and onions into 1 inch pieces. Heat a wok on medium heat, add oil, peppers, onions and ginger garlic paste.

Steps 7 and 8: While the vegetables are cooking, whisk together soy sauce, ketchup, rice vinegar, sambal oelek, and honey in a bowl. Once the vegetables are softened and slightly charred, lower the heat. Add the crispy paneer and the sauce, gently stirring to coat everything evenly. Let it cook for 3 to 5 minutes until the sauce warms and thickens. For a thicker gravy consistency, mix 1 teaspoon of cornstarch with 1 tablespoon of water and pour it into the wok. Once the sauce has thickened, remove from heat and top with sesame seeds and fresh green onions for extra flavor!

Serving Suggestions

While chili paneer makes a great appetizer, my favorite way to enjoy it is alongside fried rice, Hakka noodles, or—best of all—a steaming bowl of basmati rice and toor dal. The chunky, flavorful pieces of paneer pair perfectly with just about anything! If you need more paneer recipes, try out my air fryer paneer skewers, paired with a tangy and minty green chutney.

two bowls of chili paneer, topped with sesame seeds for garnish

Restaurant Style Chili Paneer Recipe

This Restaurant Style Chili Paneer recipe is made with chunky cubes of paneer, fresh peppers, onions, and many spices. My homemade version uses an air fryer to cook the paneer which is a healthier alternative to store-bought chili paneer and delivers an irresistible balance of sweet and salty flavours.
Total Time 45 minutes
Course Appetizer, Main Course
Cuisine Indian, Indo-chinese
Servings 4 servings

Ingredients
  

Marinade

  • 1 pack paneer (approx 350 grams, cut into 1 inch cubes
  • 2 tablespoon besan (gram flour)
  • 1/3 cup yogurt
  • 1 tablespoon olive oil
  • 1/2 teaspoon salt
  • 1 teaspoon Kashmiri chili powder * see notes
  • 1/4 teaspoon tumeric
  • 1/2 tablespoon kasoori methi (dried fenugreek)
  • 1 to 2 tablespoon water

Stir Fry

  • 1 tablespoon olive oil
  • 1 green bell pepper, cut into 1 inch pieces
  • 1 red bell pepper, cut into 1 inch pieces
  • 1 medium red onion, cut into 1 inch pieces
  • 1/2 tablespoon ginger and garlic paste

Sauce

  • 2 tablespoon low sodium soy sauce
  • 2 tablespoon honey
  • 1 1/2 tablespoon sambal oelek* see notes
  • 3 tablespoon ketchup
  • 2 tablespoon rice vinegar

Instructions
 

  • In a bowl, combine besan, yogurt, oil, paprika, turmeric, salt, fenugreek, and water. Whisk the mixture until it forms a smooth paste. If the batter feels too thick, gradually add more water until it reaches a consistency similar to pancake batter.
  • Add the cubed paneer to the bowl and toss until fully coated in the marinade. Let it sit for 15 to 30 minutes to allow the flavors to absorb. Arrange the paneer cubes evenly in the air fryer basket, set the temperature to 375°F, and cook for 8 to 10 minutes, or until the paneer is crispy and golden brown.
  • Chop the bell peppers and onions into 1 inch pieces. Heat a wok on medium heat, add oil, peppers, onions and ginger garlic paste.
  • While the vegetables are cooking, whisk together soy sauce, ketchup, rice vinegar, sambal oelek, and honey in a bowl. Once the vegetables are softened and slightly charred, lower the heat. Add the crispy paneer and the sauce, gently stirring to coat everything evenly. Let it cook for 3 to 5 minutes until the sauce warms and thickens. For a thicker gravy consistency, mix 1 teaspoon of cornstarch with 1 tablespoon of water and pour it into the wok. Once the sauce has thickened, remove from heat and top with sesame seeds and fresh green onions for extra flavor!

Notes

  • Substitute Kashmiri chili with paprika 
  • Substitute sambal oelek with sriracha 

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Hi there, welcome to Sweet & Seasoned. I’m Sabrina, the photographer and recipe developer behind Sweet and Seasoned. Here, you’ll discover a wide range of tried and tested recipes spanning from flavourful entrees to the most decadent desserts.

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