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Put butter in a pan with a thick bottom and heat it.
Add the tomato paste to the melted butter and cook over low heat, stirring occasionally, until the tomato smell is gone and the butter separates from the sides of the pan.
Add ginger and garlic paste and continue cooking for another 2-3 minutes.
Mix turmeric powder, garam masala powder, salt, and sugar into the mixture well.
Add the cashew paste and cook on low heat for about 5-7 minutes until the cashew flavor is no longer raw.
If the mixture is too thick, add ½ cup of water.
Add crushed Kasuri Methi and stir it in well.
Add fresh cream, smoothing it in with a spatula, and then mix well with the mixture and add ½ cup of water.
Add the paneer pieces and cook for 5 minutes, thickening the mixture to your desired consistency. It should ideally be medium thick.
Turn off the heat and serve the Paneer Makhanwala with bread or rice.