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Mix all the ingredients mentioned under "For making paneer kofta" ingredient list except oil in a bowl.
Make medium sized balls and fry the paneer koftas in medium hot oil till golden.
Keep the fried kofta aside.
Remove extra oil from the same pan and keep about 1 or 1.5 tbsp oil.
Add all the whole spices and fry till the oil becomes fragrant.
First add the onion paste and brown it.
Now add the ginger-garlic paste and fry for some seconds till the raw aroma of the paste goes away.
Add the tomato puree and saute for 2-3 minutes.
Add the turmeric powder, red chili powder, garam masala powder and cashew paste.
Stir and saute till the oil starts to leave the sides of the masala paste. Add water and stir.
Simmer till the gravy begins to thicken. Takes approx 11-12 minutes on a low flame.
Towards the end add crushed kasuri methi leaves and salt.
You can also add sugar if you want a light sweet taste in the curry. Simmer for 1-2 minutes more.
Lastly, add the fried paneer kofta. If serving later, you can just prepare the gravy and add kofta while serving. These paneer kofta are really soft. So if you add them before and serve them later, they will break.
While serving, garnish with some cream, grated paneer and coriander leaves.
Serve malai kofta hot with rotis, naan, steamed basmati rice or jeera rice.