Nepalese handicraft history can be traced back to the stone age when human beings were inadequate of tools of any kind. The history of artistic handicrafts only began during the 5th Century A.D., when different religions began to form their bases among the people of Nepal. Hence we see a lot of religious influence on Nepalese handicrafts. Introduced by the Nordic Aryans, mixed with different groups of Mongolians, nurtured by Buddhist and Hindu concepts adapted the taste of market. The historical development of Nepalese handicraft industry is very old although has its rise and falls. According to the reference found in Kautilya's Economics about various productions and exports from Nepal, during the time of Chandra Gupta Mouriya, in fourth century, Nepal was known for quality rainproof woollen blankets. The blankets were made of eight pieces joined together of black colour known as "bhiringisi" as well as "apasaraka". Similarly the good quality blankets are mentioned in the epics of Jain religion "Brihatakalpasutra Vhashya". Various famous Chinese travellers like Wanghunshe and Huansang in 648 A.D. have appreciated Nepalese arts and crafts and the skills of Nepalese craftsmen and artisans in their travelogues.

From the beginning up to the mid-nineteenth century, the rulers of the country promoted national industries and trade to various measures of production, promotion and encouragement. Saving national industry only imported commodities which were not produced locally. Towards the end of the nineteenth century Nepalese arts and crafts industry and the entire home based industries in general suffered a lot due to the general liberal import policy of the government. Prior to the establishment of British regime over India and entering a peace treaty with Tibet in 1904 A.D. Nepal was interpreted as the main route to Tibet for external trade with other countries. But the treaty of 1904 A.D. facilitated the British to open a new route between India and Tibet through Chumbic Valley and the trade route treaty of 1923 A.D. between Nepal and British India, which was not in favour of Nepal and had very unfavourable effects both on industries and on flourishing trade of the country.

In Nepal, the production of handicraft is an age-old practise. Novel handicraft is also developed in harmony with changing market taste. For the last 25-30 years, export of handicrafts has been growing. The development of handicraft helps the conservation of national heritage and culture of country; which in return contributes to appease poverty by creating job opportunities. The handicrafts of Nepal is produced in a traditional way, from generations to generations leading the footpath of ancestors or from forefather to grandfather to father and to son and this continuity has given the survival to Nepalese handicrafts, preserving their heritage, cultural values, aspects and tradition. In this modern age, Nepalese handicraft has its own existence in the international arena enticing millions of admirals and crafts lovers with it genuine craftsmanship. Today these arts and crafts is one of the major exporting industry of Nepal, earning huge foreign exchange and providing lots of employment to thousands of Nepalese craftsmen, artisans, promoters and businessmen generating revenue to government.