Dice the onions finely or it can also be pureed
Boil the tomatoes in water and once they have cooled down, remove the skin and puree the tomatoes
Cut the paneer into cubes
Heat 2 tbsp of butter in a kadai/ pot
Once the butter has melted, add cumin, cinnamon, bay leaves, cardamom, and cloves
Now add the onions. Sauté the onions until they turn golden
Add the ginger-garlic paste. Keep stirring until the raw smell goes away
Now add chili powder, turmeric powder, and garam masala. Stir everything thoroughly
Add the cashew nut paste. Stir and bring everything together
Add the pureed tomatoes. Stir
Keep stirring occasionally until the contents of the pot has thickened in consistency
Now add 1 & 1/2 cups of warm milk and 1 & 1/2 cups of warm water. Add the red food coloring to warm water (Optional)
Add salt and stir. Give the masala a taste
Stir everything and bring it to a boil. Once the masala base starts to boil, reduce the heat and let it simmer for 10 to 15 minutes
After 10 to 15 minutes, add the cubed paneer to the masala base
Let the paneer cook for 5 to 10 minutes
Add sugar to the paneer masala and stir. Give it a taste and add more if required
Garnish with kasthuri methi and transfer the masala to a serving dish and add the remaining 1 tbsp of butter.
Serve immediately with hot rotis/parathas or jeera rice.
