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Skip this step if you want to use coconut milk in the recipe. Add cashews or poppy seeds to a grinder jar and make a fine powder first. Add fresh coconut and repeat grinding. Pour 6 to 8 tbsps water to make a smooth paste. If required add a little more water.
Heat a pan with oil on a medium heat. Once the oil is slightly hot, add whole spices - bay leaf, star anise, cumin, cloves, cinnamon and cardamoms.
When the spices begin to sizzle, add ginger garlic paste and fry till it turns slightly aromatic for about 60 seconds. Do not over fry, it can make the gravy bitter.
Add onions, sprinkle salt and fry till they turn transparent or golden.
Add tomatoes , salt and turmeric. Fry till tomatoes turn mushy. If required splash a bit of water and cook covered until the tomatoes turn mushy.
Next add red chili powder, garam masala, coriander powder and mint leaves or coriander leaves. Carefully saute for two to three minutes without burning.
Add the smooth ground paste. Fry for three to four minutes on a medium flame stirring occasionally. It must begin to release a nice aroma of coconut and poppy seeds. [If using coconut milk stir it together with ¾ cup water]
Pour water (or diluted coconut milk) and mix well. Bring this to a boil and reduce the heat, cook till the gravy thickens & you see specks of oil floating on the korma. Keep stirring occasionally.
Once the curry reaches a desired thick consistency, add paneer and gently stir.
Turn off the heat. Let paneer korma rest for a while so it absorbs the flavors. Serve with rice, roti or naan.
Perform all the steps following the instant pot saute mode, except for adding the coconut paste or coconut milk. Reserve this for adding later. Also you will use only 1 cup water for cooking the gravy.
Pressure cook for 5 mins and wait for 2 mins. Release the pressure manually.
Stir in the ½ to ¾ coconut milk or the coconut paste. If you think your korma is too thick, pour little boiling water. Taste test and add more garam masala and salt if required.
Let cook on saute mode until aromatic and thick for 3 mins.
Turn off the IP and add paneer. Cover paneer korma with a lose lid and serve after 10 mins. Garnish with coriander leaves.