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 AD, 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 AD 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 great deal 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 AD, Nepal was interpreted as the main route to Tibet for external trade with other countries. But the treaty of 1904 AD facilitated the British to open a new route between India and Tibet through Chumbic Valley and the trade route treaty of 1923 AD 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.