Carpet manufacturing has been age-long traditional economic activities in the northern mountain belt of Nepal. But, commercial carpet industry began in Nepal with the exodus of Tibetan refugees in the late sixties. It is currently one of the most important export items Nepal has and has been one of the prime products to Nepalese economy.

The origin can be traced back to the Neolithic age (7000 B.C.). Certain products of the era consisting of warp and weft were textile resembling flat weave kilims have been found. After that, the rugs were created by forming knots to make a pile. It is anticipated by the researchers that they may have originated in the dry steppe regions inhabited by the nomads.

The nomadic tribes of the region did carpet weaving. They instead of slaughtering their animals wove their wool into carpets. The carpets were spread on their tent floors or hung from the walls to provide protection against the creeping insects and dirt etc and insulated the tent to an extent against the cold. They were even used as seat covers or saddlebags or to sleep or to pray on. The rugs and carpets were woven with the patterns depicting flowers, animals and trees, their culture, tradition and religious beliefs.

One of the earliest carpets till date has been found in the tomb of a Scythian Prince in southern Siberia and it dates back to 5th century BC. This region is inhabited by the followers of Islam and so the carpets play an important role in Islamic culture as well as religion. From the thing of utility as floor, bed or coverings at the time of origin they have become a thing of exotic decoration and class.

Chinese and Tibetan rugs were of entirely different style and design. They featured the symbols of Buddhist and Taoist religions. In India the art of woolen carpets was there as early as 5th century BC but the more famous Persian carpet art cam with the Mogul Emperor Akbar. This art of carpet weaving was obtained from the Persian artists and modified to Indian Royal tastes.

The carpets were at one point so highly regarded and valued that they were considered better than money. According to a legend, The great Egyptian Queen Cleopatra actually presented herself to Caesar - rolled up inside a carpet. Marco Polo discovered some of the earliest fine Orientals in the 13th century whilst travelling in Persia. He can be given the credit of introducing the craft outside the carpet belt.