Paneer Yakhni is a delightful Kashmiri dish that has paneer as the key ingredient, prepared in a creamy yogurt and cashew based gravy. There is neither onion nor garlic added in this recipe, keeping it simple and very flavorful.

Traditionally, the dish is known for its mild flavors, but every bite bursts with fragrant spices. With a soothing creamy gravy and tender paneer cubes, it’s perfect for those who enjoy comfort food with a sophisticated touch.
I am not sure if my recipe is 100% authentic, but it sure did turn out very delicious. And most importantly, I love how effortless and quick it was to prepare.
This dish showcases the subtle yet captivating spices that Kashmiris use to flavor their food, without overpowering the main ingredients.
Why You’ll Love Paneer Yakhni
Paneer Yakhni is a dish that offers comfort and elegance all in one. The velvety yogurt gravy, lightly spiced and fragrant, wraps around tender cubes of paneer, creating a delightful contrast between the rich and creamy base and the chewy texture of the paneer.
The flavors are subtle, making it a perfect dish for those who enjoy a mild yet aromatic meal.
It’s a wonderful vegetarian option that’s as satisfying as any meat-based Yakhni. Plus, it’s relatively simple to prepare, making it an excellent addition to your repertoire of cozy, homemade meals.
What is Yakhni?
The word "Yakhni" originates from the Persian word for broth or stock. Traditionally, Yakhni is made with meat, especially lamb, but over the years, paneer has emerged as a popular vegetarian alternative. The key element of Yakhni is the yogurt-based gravy that’s light, tangy, and infused with a medley of whole spices.

Ingredients you need for Paneer Yakhni
Soft Paneer Cubes - Use good quality paneer cubes. You can either make it at home or use store bought. Here is my recipe for homemade paneer
Cashew - The creaminess and richness of the gravy comes from using cashew. You want to use unflavored cashew. Soak the cashew for a while so it softens and becomes easy to blend.
Yogurt - The gravy of this dish is yogurt and cashew base. Use plain thick yogurt for this dish.
Pro tip : When you use yogurt in any curry, whisk it with a little. This will ensure that the yogurt will not curdle after adding to the pan.
Spices - You have to make a spice powder by using cumin seeds, coriander seeds, fennel seeds, dry red chili, green and black cardamoms, black peppercorns and cinnamon stick. Apart from the spice powder, you will also need 1 or 2 bay leaves as the initial flavor booster.
Ginger - The dish doesn't call for garlic, but you need a small doze of grated ginger to enhance the flavor and add that pungent taste.
Ghee - The dish is prepared in ghee, which also adds richness to the dish and a beautiful aroma.
Optional Ingredients:
Bell peppers - When I was reading about this dish, I realized that some adds bell pepper and some keeps it simple with just paneer. I like the addition of bell pepper as it not only adds crunch but also a pop of color in this otherwise safed (white) paneer dish.
Steps to prepare

1 - Cut the paneer into bite size cubes. Keep 4 to 5 pieces aside and fry the rest with very little oil until it mildly golden brown on both the sides.
2- If you are using bell pepper, dice that too into bite size pieces and fry those too in the same pan just for a few minutes.
3- Take the paneer and the bell peppers off the pan.

4-Soak the cashew in little water. This will soften the cashew and will help to blend better.
5- Rub the oil from the pan and add the spices to make the spice powder. Toast the spices for a couple of minutes until you get the aroma.
6- Then blend it to powder. Keep in mind that you may not be using all the spice powder and might have a little extra. Save the extra spice powder to use later for the same dish or another.

7- In a small blender, blend the soaked cashew with little water and the paneer cubes that were kept aside. Blend to a smooth purée and add more water if needed.
8- To the pan add ghee, bay leaves and grated ginger. Let it sizzle for a few seconds.
9- Pour the cashew and paneer purée and toss it around to cook.

10- Add the bell pepper and paneer that was kept aside, season with salt sugar and add spice powder that was kept aside. Toss it around to mix everything. Based on how much gravy you want, you can add more water.
11- In a bowl add the yogurt and whisk it with a little flour. Add the yogurt to the skillet and toss it around.
12- Finish it by adding a tiny pinch of saffron. Taste the dish for salt and add more if needed.
Enjoy paneer yakhni warm with your choice of bread on the side.
Tips for the Perfect Paneer Yakhni:
Curdling Prevention: Always add yogurt on low heat and stir continuously. If the heat is too high, the yogurt might curdle and ruin the texture of the gravy. Also add a tiny amount of wheat flour to yogurt and whisk to incorporate it. This will avoid the yogurt from curdling.
Spice Balance: Kashmiri cuisine is all about balance. Avoid overpowering the dish with too many spices. The subtlety of the flavors is what makes Yakhni unique.
Paneer Freshness: Use fresh, soft paneer for the best texture. If your paneer feels hard, soak it in warm water for a few minutes before adding it to the dish.
FAQs
Unlike many Indian paneer dishes that are tomato-based or heavy on masalas (spices), Paneer Yakhni stands out for its subtle flavor and light texture. It features a yogurt-based broth rather than a rich, thick gravy. The dish focuses on the balance of flavors from whole spices and yogurt, creating a delicate, creamy sauce without being overly rich or spicy.
Yes, you can make Paneer Yakhni vegan by replacing paneer with tofu. For the yogurt base, you can use plant-based yogurt made from soy or coconut, ensuring it has a similar creamy texture to dairy yogurt. Keep in mind that the flavor may vary slightly depending on the plant-based alternatives you use.
Paneer Yakhni pairs wonderfully with steamed basmati rice or jeera rice (cumin rice). It can also be served with naan, roti, or Kashmiri bread like lavasa. A light side salad or raita can complement the dish well.

With its creamy texture, delicate spices, and hearty paneer, it’s a dish that can turn a simple dinner into something special. Whether you're a lover of paneer or just looking to try something new, Paneer Yakhni is sure to delight your taste buds with its soothing and aromatic flavors.
More Paneer recipes to try from the blog:

Paneer Yakhni
Ingredients
- 10 oz Paneer cubes
- ½ Red Bell Pepper (optional)
- ½ Green Bell Pepper (optional)
- 1 tablespoon Ghee
- 1 Bay leaf
- 1 tablespoon Grated ginger
- ¼ Cup Cashew
- ⅓ Cup Yogur
- 1 teaspoon Wheat flour (optional)
- Tiny pinch of saffron (optional)
- Salt to taste
- 1 teaspoon sugar
Spice Powder
- ½ teaspoon Coriander seeds
- ½ teaspoon Cumin seeds
- 1 teaspoon Fennel seeds
- 3 Green cardamom
- Few black peppercorns
- 1 Black cardamom
- ½ Inch Cinnamon stick
- 2 Dry red chili
Instructions
- Prepare the spice powder first. Dry roast the spices mentioned under the section and then grind it using a spice grinder.
- Soak the cashew with little water.
- Dice the paneer into bite size cubes and keep 4 to 5 cubes aside to be used later.
- To the pan, add very little oil and fry paneer cubes until golden on each side. Take it off the pan.
- Now add the diced bell peppers and toss for a minute or two and take it off the pan.
- Using a blender, blend the soaked cashew, paneer cubes kept aside and little water to make a smooth purée.
- To a bowl, add the yogurt along with the flour and whisk. Keep aside.
- Pour ghee to the medium hot pan and add the bay leaf along with the grated ginger. Stir it around to cook for a minute.
- Pour the cashew and paneer purée and stir it around to cook for a minute or two.
- Add the fried paneer cubes, the bell pepper, salt, sugar, 2 tablespoon of the spice powder and toss it around. Add water if it looks too dry. Let it simmer for a few minutes.
- Taste for salt and add more if needed.
- Finally, add the yogurt and mix again. If you are using saffron, crush a tiny pinch in your palm and add it.
- Let the flavor infuse for 2 minutes and your Paneer Yakhni is ready to serve.