Toss paneer cubes in soy sauce. Now add cornstarch and toss till it forms a thin batter with the soy sauce and coats the paneer pieces well.
Heat the large skillet on medium-high heat. When hot, add a tablespoon of avocado oil and add the paneer pieces in a single layer without overcrowding them. Let the paneer brown for 2 minutes, then flip the pieces using tongs and brown on the other side for 2 minutes. Remove from pan and keep aside. Repeat the process with the remaining paneer pieces.
Heat the same skillet, add the remaining tablespoon of avocado oil and add chopped ginger, garlic and dried red chilies. Stir and saute for 1 minute.
Add onion and peppers and saute for 4-5 minutes, until the onions start turning transparent but are still firm. Toss in the browned paneer pieces.
Finish with Sauce
Mix together the ingredients for the sauce until the cornstarch is well combined. Pour the sauce over paneer, onion and peppers and stir till it coats everything well and starts thickening.
Turn off the heat when it reaches your desired thickness, about 2-3 minutes (see notes about making a wet curry). Garnish with sliced green onions and serve warm with steamed rice or chow mein.
Use dark soy sauce for a richer flavor. For umami-packed results, I like to use dark soy sauce. It adds a nice deep amber color and an intense flavor. If you only have regular soy sauce on hand, add another ½-1 Tablespoon depending on how salty you like your dish.
Alter the sauce to dry or gravy. This recipe results in a semi-dry dish, popularly known as 'Dry Chilli Paneer' in restaurants. To make more sauce, simply add ½ cup water or broth to the sauce mix and simmer for 2-3 minutes.
A wonderful vegetarian recipe you can make gluten-free or vegan. Paneer is a great vegetarian adaptation of chilli chicken. Simply use tamari instead of soy sauce for a gluten-free version. You can also substitute the paneer with extra-firm tofu to make it vegan.
Note: The nutrition facts below are my estimates. If you are following any diet plan, I recommend cross-checking with your preferred nutrition calculator.