“Schezwan” (the Indian spelling for Sichuan) chili paneer is a sweet, tangy, and fiery stir-fried paneer dish. The base of the sauce comes from Schezwan chutney, made by frying Kashmiri chili paste in oil with fragrant aromatics.

Chili paneer was one of my favorite Indo-Chinese foods growing up; I just loved the combination of salty soy sauce, tangy rice vinegar, spicy Kashmiri chilies, and aromatic ginger and garlic.
I tested the dish several times before landing on this version. A homemade chili paste is certainly more work, but it’s well worth the effort to get the depth of flavor you need here. Serve alongside homemade chapati, naan, or fluffy basmati rice.
👩🏽🍳 Expert Tips
key details before we dive into the cooking!
- Use gloves or rub your hands with neutral oil before handling the chilies to avoid any stinging. Once you’re done handling the chilies, washing the oil with soap and water will remove most of the capsaicin.
- When making the chili paste, avoid inhaling the chili puree (as it can induce coughing).
- The recipe makes ½ cup of chutney, which yields plenty of extra chutney for other uses. It’s delicious as a marinade, topping for fried eggs, or sauce for dumplings.
- The chutney can be kept in the fridge for 1 to 2 weeks.
Ingredient Notes

- Dried Kashmiri Chilies: You can purchase whole, dried chilies at Indian grocery stores or specialty spice shops, or online. Kashmiri chilies are a must, because they’re much milder than other varieties and impart a beautiful red hue to the sauce.
- Paneer: Sach Foods sells my favorite paneer, which softens perfectly in the sauce, though it’s a little harder to find. If you come across Gopi paneer, make sure to cut the cheese into cubes, then submerge it in warm water for 10 – 15 minutes before draining. This helps “pre-soften” the cheese.
For a full list of ingredients and their quantities, please refer to the recipe card.
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Schezwan Chili Paneer
Ingredients
For the Schezwan Chutney (Makes about ½ cup):
- 15 grams whole dried Kashmiri red chilies, or about ½ cup packed chilies
- ¼ cup neutral oil, such as canola or peanut oil
- ¼ cup grated garlic, from about 6 – 8 medium cloves
- 2 tablespoons grated ginger
- 1 ½ tablespoons seasoned rice wine vinegar
- 2 tablespoons honey, plus more if needed
- 1 ½ tablespoons soy sauce, plus more if needed
For the Schezwan Chili Paneer:
- 1 teaspoon neutral oil, such as avocado or peanut oil
- 1 large green bell pepper, deseeded and cut into ½” x 1” chunks
- 2 large scallions, halved lengthwise, then cut crosswise into 2” sections
- 2 tablespoons Schezwan Chutney, recipe follows, plus more if desired
- 2 6-ounce blocks paneer, cut into ½” x 1” chunks
- Seasoned rice vinegar, honey, or soy sauce, as needed
- A small handful of cilantro, finely chopped for garnish
Instructions
For the Schezwan Chutney:
- First, prepare the chilies: Set 1 cup of water on the stove to boil. Meanwhile, deseed 15 grams whole dried Kashmiri red chilies by snipping off the stalk with scissors, then tearing or snipping each chili into pieces and discarding the seeds. Once the water is boiling, place the deseeded chilies in a heatproof bowl, then pour enough hot water on top to just barely submerge the chilies. Cover and let sit for 25 minutes, until the chilies are soft and hydrated.
- Puree the chilies: Strain and rinse the chilies, discarding the water. Puree the chilies using a blender or food processor until a smooth, homogeneous paste forms. The paste should be slightly looser than tomato paste. If needed, add a tablespoon or two of fresh water at a time to smooth out the paste. Avoid inhaling the chili paste as it can make you cough.
- Make the chutney: Heat ¼ cup neutral oil in a small cast iron pan or deep skillet at medium-low heat. Stir and mash the chili paste into the oil for about 3 minutes.Add ¼ cup grated garlic and 2 tablespoons grated ginger, mixing to incorporate. Cook for 2 minutes until the paste begins to stick to the bottom or sides of the pan. If at any point the paste looks like it’s getting too dark, reduce the heat. Add the 1 ½ tablespoons seasoned rice wine vinegar, 2 tablespoons honey, and 1 ½ tablespoons soy sauce, stirring to incorporate. Saute for 3 – 4 minutes until the sauce is a deep red and the oil has clearly separated (the oil should be a bright red). Taste the chutney and adjust seasoning as necessary by adding more vinegar, soy sauce, or honey. The chutney should taste quite punchy; we’ll only be adding a couple tablespoons of it to the paneer, so it should taste slightly spicier, sweeter, saltier, and more acidic than you’d like.
- Turn the heat off, and transfer the chutney to a heatproof container to cool to room temperature. The chutney will last in the fridge for a week or two.
For the Schezwan Chili Paneer:
- Make the chili paneer: Heat 1 teaspoon neutral oil in a wok, medium cast iron pan, or skillet at medium-high heat. Add 1 large green bell pepper, and saute about 1 minute until slightly charred. Add 2 large scallions (cut into 2-inch pieces) and saute for 1 minute until the peppers and scallions are just barely cooked through.Reduce the heat to low, then wait 30 seconds before adding 2 tablespoons Schezwan Chutney, 2 tablespoons of water, and 2 6-ounce blocks paneer (cut into ½-inch by 1-inch chunks). Let the sauce reduce for 1 minute.
- Finishing touches: Taste the sauce, and adjust with more chutney, vinegar, soy sauce, and honey as needed. If the sauce is too thick, you can loosen it with a bit of water. Increase the heat to medium-low and let cook for an additional 1 – 2 minutes, until the chili sauce clings to the paneer. Remove the pan from the heat and serve immediately, garnishing with A small handful of cilantro.
Notes
- Sach Foods makes my favorite paneer. If buying Gopi, you’ll want to soak it in warm water for 15 minutes, then drain it before cooking.
- Kashmiri chilies are a must, because they’re much milder than other varieties and impart a beautiful red hue to the sauce.
- Use gloves or coat your hands with neutral oil before handling the chilies to avoid any stinging. Once you finish handling, wash the oil off thoroughly with soap and water.
- When making the chili paste, avoid inhaling the chili puree (as it can induce coughing).
- The recipe makes ½ cup chutney, which yields plenty extra for other uses. It’s delicious as a marinade, topping for fried eggs, or sauce for dumplings.
- The chutney can be kept in the fridge for 1 to 2 weeks.
Nutrition
The nutritional information on this website is only an estimate and is provided for convenience and as a courtesy only. The accuracy of the nutritional information for any recipe on this site is not guaranteed.







