Toss the paneer pieces with turmeric powder, Kashmiri red chilli powder and salt to taste.
Heat oil in a flat skillet over medium-high heat. Arrange the paneer pieces on the skillet and fry from two sides until lightly browned.
Whisk yogurt with coriander powder, turmeric powder, Kashmiri red chilli powder, garam masala powder, and cashew nut paste. Set aside.
Heat 1 tablespoon oil in a pan over medium heat.
Add whole dry red chilies, green cardamoms, cloves, cumin seeds and let them crackle. Add ginger and green chilies and fry for 20-30 seconds
Now add the yogurt whisked with the spices to the pan.
Add the fried paneer cubes to the pan and cook for 4-5 minutes. You can add some water if the curry is thick for your liking.
Add salt to taste and 1 tablespoon Kasuri methi and cook for another minute. Dahi paneer is ready. Serve it hot.