To begin making the Paneer In Coconut Gravy Recipe, we need to first prepare the masala for the gravy.

In a heavy bottomed pan, add coriander seeds, cumin seeds and dry red chillies on a low flame. Roast the spices until they turn aromatic. Turn off the flame and allow it to cool. 

In another pan, add one tablespoon of butter. Once the butter has melted, add chopped garlic, ginger and saute until the aroma wafts through the air. 

Next, add the chopped coconut pieces and saute till raw smell of coconut goes away. Finally, add diced onion and fry till they turn translucent, turn off heat and allow it to cool. 

In a mixie jar, add dry roasted spices and grind into coarse powder. To the ground powder, add onion ginger, garlic and coconut mixture and grind smooth into a paste. 

To this ginger garlic onion and coconut mixture, add little salt and mix well. Marinate the diced paneer cubes in this paste for half hour.

In the meantime, in a pan, add remaining butter and saute onions until they turn soft.

Add finely chopped tomatoes and salt. Mix well and cook covered on low heat until the tomatoes turn soft and mushy. 

Mash tomatoes with the back of a ladle and cook till the tomato mixture looks like a paste. Add garam masala and saute until the masala combines well into the mixture. 

To this mixture, add paneer along with the marination, about 1/4 cup of water and mix well. Add salt according to taste.

Cook the Paneer gravy covered on low heat for 5 to 7 minutes. Add little more water to adjust the consistency according to your preference. 

Finally, add kasuri methi to the Paneer In Coconut Gravy recipe and give it all a good mix. Once done turn off the heat and check the spices and salt. Adjust according to taste.

Serve this Paneer In Coconut Gravy along with hot Phulkas or even Jeera Rice along with a Kala Chana Salad to make it a complete North Indian Style Dinner.