Paneer Butter Masala Recipe (Restaurant Style)

Paneer butter masala is a beloved North Indian curry where soft paneer cubes are simmered in a silky, mildly spiced tomato-cashew gravy enriched with butter and cream. It’s a staple at Indian restaurants and festivals, known for its rich, slightly sweet flavor and luxurious texture. This recipe achieves that signature restaurant-style taste at home by using a few key techniques—blooming spices, a smooth pureed base, and finishing with cream and butter.

Ingredients

2 tablespoons (30 g) butter, plus 1 tablespoon (15 g) for finishing
1 tablespoon (15 ml) oil (neutral, like sunflower or canola)
2 bay leaves
4 green cardamom pods, lightly crushed
1 cinnamon stick (2-inch / 5 cm)
3-4 cloves
1 large onion (about 150 g), finely chopped
1 tablespoon (15 g) ginger-garlic paste (or 1-inch ginger + 5 garlic cloves, minced)
2-3 green chilies, slit (adjust to taste)
4 large tomatoes (about 600 g), roughly chopped
12-15 cashews (about 20 g)
1 teaspoon (5 g) red chili powder (Kashmiri for color, or use 1/2 tsp regular)
1/2 teaspoon (2.5 g) turmeric powder
1 teaspoon (5 g) ground coriander
1/2 teaspoon (2.5 g) garam masala
1 teaspoon (5 g) sugar (optional, to balance acidity)
Salt, to taste
1/2 cup (120 ml) heavy cream (or full-fat coconut milk for a dairy-free option)
1 lb (450 g) paneer, cut into 1-inch cubes
1/2 teaspoon dried fenugreek leaves (kasuri methi), crushed
2 tablespoons (30 g) butter, for finishing
Fresh cilantro, chopped, for garnish

Instructions

Soak the cashews: Place the cashews in a small bowl and cover with warm water. Let them soak while you prepare the other ingredients (at least 15 minutes).
Cook the aromatics: Heat the 2 tablespoons butter and oil in a heavy-bottomed pan or Dutch oven over medium heat. Add the bay leaves, cardamom, cinnamon, and cloves. Sauté for 30 seconds until fragrant.
Add the chopped onion and cook, stirring occasionally, until golden brown, about 6-8 minutes. Add the ginger-garlic paste and green chilies; cook for 1-2 minutes until the raw smell disappears.
Add tomatoes and cashews: Stir in the chopped tomatoes and the soaked cashews (drain the water). Add the red chili powder, turmeric, and ground coriander. Mix well.
Cook the tomato mixture: Cover the pan and cook over medium-low heat for 10-12 minutes, stirring occasionally, until the tomatoes are soft and mushy. Turn off the heat and let the mixture cool slightly.
Blend the gravy: Remove the bay leaves, cardamom pods, cinnamon stick, and cloves (if you can find them; if not, it’s okay). Transfer the mixture to a blender and blend until completely smooth. You may need to add a little water (about 1/4 cup / 60 ml) to help it blend. Return the puree to the pan.
Simmer the gravy: Place the pan back over medium heat. Add the sugar (if using) and salt to taste. Bring the gravy to a gentle simmer. If it’s too thick, add a little water or milk to reach your desired consistency—it should coat the back of a spoon.
Add cream and paneer: Reduce the heat to low. Stir in the heavy cream and the paneer cubes. Simmer gently for 5-7 minutes, just until the paneer is heated through. Do not boil vigorously, or the cream may curdle.
Finish with fenugreek and butter: Crush the dried fenugreek leaves between your palms and sprinkle them over the curry. Add the final 1 tablespoon of butter and stir until melted. Turn off the heat and let it rest for 5 minutes.
Garnish with fresh cilantro and serve hot.

Tips

Kashmiri red chili powder gives a vibrant red color without too much heat. If using regular chili powder, reduce the amount to 1/2 teaspoon to avoid making it too spicy.
For a richer texture, you can add 2 tablespoons of almond flour or ground almonds along with the cashews. This is a common variation in some regions.
Don’t skip the kasuri methi (dried fenugreek leaves)—it adds a distinctive, slightly bitter aroma that is essential to the dish’s flavor profile. If you don’t have it, you can skip it, but the flavor will be less authentic.
If your gravy is too thin, simmer it uncovered for a few extra minutes to reduce. If it’s too thick, add a splash of water or milk.
To prevent paneer from becoming rubbery, add it at the end and only simmer gently. Overcooking makes it tough.

Serving Suggestions

Serve paneer butter masala hot with naan, roti, or jeera rice. It also pairs well with a side of pickled onions and a fresh green salad. For a complete meal, add a side of dal or a vegetable dish like aloo gobi.

Variations

Vegan: Replace paneer with extra-firm tofu (pressed and cubed) and use coconut cream instead of heavy cream. Use a plant-based butter or oil.
Nut-free: Omit the cashews and instead use 2 tablespoons of sunflower seeds or 1/4 cup of cooked white beans to thicken the gravy.
Extra vegetables: Add 1 cup of green peas or bell pepper strips along with the paneer for a more substantial dish.
Smoky flavor: For a smoky twist, you can add a pinch of smoked paprika or a drop of liquid smoke (optional, not traditional).

Storage and Reheating

Store any leftover paneer butter masala in an airtight container in the refrigerator for up to 3-4 days. The flavors will meld and deepen overnight. To reheat, gently warm it in a saucepan over low heat, adding a splash of water or milk to loosen the gravy if needed. You can also microwave it in 30-second intervals, stirring in between. Avoid boiling, as the cream can separate. This curry also freezes well for up to 2 months; thaw overnight in the fridge before reheating.

Frequently Asked Questions

Can I use store-bought paneer? Yes, store-bought paneer works perfectly. If it’s very firm, you can soak the cubes in warm water for 10 minutes before adding to the gravy to make them softer.

Why does my gravy taste bitter? Bitterness can come from burning the spices or garlic. Make sure to cook the onions and garlic on medium heat and stir frequently. Also, do not over-toast the whole spices at the beginning.

How can I make it less spicy? Reduce or omit the green chilies and use mild red chili powder. You can also add a teaspoon of sugar to balance the heat.

Can I use yogurt instead of cream? Yes, you can substitute with plain full-fat yogurt, but whisk it well and add it at the very end off the heat to prevent curdling. The texture will be slightly tangier and less rich.

What if I don’t have a blender? You can use an immersion blender directly in the pan, or you can mash the tomato-onion mixture thoroughly with a potato masher until smooth. The texture will be slightly more rustic.

Is paneer butter masala the same as butter chicken? The base gravy is very similar, but paneer butter masala uses paneer instead of chicken. The cooking time is shorter, and the spice profile is often slightly milder.

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