Paneer and tofu have a lot in common. Firstly, both foods are sold in solid white blocks. Paneer and tofu are both produced using curdling and pressing processes, and are thus similar in texture. Each also has a mild taste on its own yet absorbs the flavors of its marinades. As a result, they can be used interchangeably in recipes. Tofu, opposed to paneer, is completely dairy-free and vegan. Pro tip! When you choose a tofu to replace paneer, opt for extra-firm tofu. It is soft and slightly crumbly and thus most reminiscent of paneer.