Add cornflour, kashmiri chilli powder, salt to a bowl and give it a whisk. Add the paneer cubes and toss to coat. Sprinkle a little water just to get the coating to stick to the paneer. Toss and set aside.
Heat oil in a wok or pan and add the paneer piece by piece to prevent them from sticking to each other. Fry them on high heat for 2-3 minutes, turning once or twice till they are golden brown. Take them out on a plate and set aside.
Whisk together all the ingredients under sauce and set aside.
Remove any excess oil from the wok, leaving behind 1.5 tablespoon oil. Once the oil is hot, add ginger, garlic and green chillies. Saute for a minute or two and add onions and capsicum.
Stir fry for 2-3 minutes on high heat and add the paneer cubes. Toss the paneer with the aromatics for a minute.
Give the sauce a whisk and add it to the wok. Toss together on high heat for 2 minutes till the cornflour is cooked and the sauce takes on a thick, glossy finish and coats the paneer pieces. Add a little water if you want a little more sauce. Sprinkle with chopped spring onions and serve hot.
Chilli Paneer Gravy: For saucier chilli paneer, add an extra half cup of water to the sauce
Vegan Chilli Paneer: You can easily substitute the paneer for tofu to make chilli tofu
You can substitute the store bought chilli sauce with homemade chilli garlic paste. I highly recommend making it yourself. I used Kashmiri Red Chillies for this recipe which have more colour than heat
If using homemade chilli paste, once you add it to to the wok, be sure to fry it until almost all of the raw aroma goes. This will help you avoid the raw chilli taste and smell in the dish.