Place the paneer cubes in a deep bowl. Pour enough hot water over the paneer to cover; sprinkle the turmeric into the water. Set aside to allow the hot water to soften the paneer. Drain.
Heat the oil in a large pot over medium heat. Fry the onions in the oil until they begin to change color. Add the ginger and garlic and fry together another 5 minutes. Sprinkle the garam masala into the mixture; cook and stir for 2 minutes. Pour the tomatoes into the mixture; season with salt and stir. Continue cooking until the oil begins to separate, another 5 to 7 minutes. Stir the sugar into the mixture and remove from heat. Set aside to cool.
Blend the tomato mixture in a blender until you have a smooth sauce; return the sauce to the pot and heat over medium heat until warm, about 5 minutes. Stir the cream into the sauce. Gently fold the paneer into the sauce to coat. Garnish with cilantro to serve.
