According to a theory, the history of paneer can be traced back to the Persian and Afghan rulers that ruled North India in the 16th century. At that time, paneer used to be prepared using either goat or sheep milk.
With time paneer too went through transformation and the paneer we know today was actually introduced in the 17th century. The process of modern paneer making is derived from the Portuguese method of ‘breaking’ milk using an acid like lemon juice.