Kathmandu is a shoppers' paradise, the Thamel area in particular is awash with souvenir shops and the open air Basantapur Market just off the Durbar Square has thousands of artifacts for sale, some will be from ndia though, so buyer beware! The local produce markets at Indra Choke and Asan Tole are well worth a visit, both to purchase items such as spices and incense and watch the locals habbling over the prices of the colourful piles of vegetables, fruit, herbs and spices. Take photographs but don't intrude, a telephoto lens is useful here.
OK so what to buy!
You will find Tibetan wool and Indian silk carpets for sale. You can see carpets being made at the Tibetan Refugee Carpet Factory just across the road from the Bodhnath Temple complex. Drop in and have a look there is no hard sell, the carpets are expensive though. I bought mine with the help of our trek sirdar at the Tibetan market at Namche, much cheaper there.
There are literally hundreds of small shops in Kthmandu selling cheap handicrafts, ideal for presents and souvenirs. There are prayer wheels, knives, wood carvings, soapstone carvings, brassware, small boxes of wood, metal and stone, prayer flags, chess and backgammon sets, wooden masks, etc, etc, the list goes on and on ....
Some parts of Thamel hum to the sound of sewing machines embroidering t-shirts. They do a roaring trade and will also embroider anything for you, I had my fleece jacket done.
Genuine antiques can be found in Kathmandu but there are many skilful artisans who are skilled in the ageing of modern reproductions, If you do buy a genuine antique from a shop such as the Potala Gallery, you will need an export licence to take it home.
Thankas are Tibetan religious scenes painted on cotton. Some thankas are very expensive as the intricate designs take many, many hours to produce and gold is incorporated.
The Newari craftsmen produce many small wooden objects, miniature versions intricately carved windows are very popular and there are many street hawkers in Kathmandu who will try to sell you chess and backgammon sets. Other sall items include jewellery boxes, masks and small statues.
There are many kinds of beautiful hand made paper available at a fraction of its cost in the West. The paper is made into books and other easily transportable items such as lampshades.
Prayer wheels and prayer bells are the most common, the Patan Durbar Square market is a good source. Other items include small boxes decorated with yak bone and torquoise-like stuff, rings and belt buckles.
Nepalese, tibetan and Indian fabrics can be bought at reasonable prices, avoid the tourist areas though, go to Asan Tole or perhaps Patan to buy these.
Asan Tole is a good source for spices, which are much cheaper and fresher that can be bought in the West, look out for the powdered Saffron.
There are many second hand bookshops in Kathmandu where you can pick up something to read on the trail. Pilgrim's Bookshop in Thamel is one of my favourite places in Kathmandu, they also sell handicrafts, fabric and other souvenirs. As well as old copies of Himalayan books you will also find new versions printed in India of for example, Chris Bonnington's Everest the Hard Way.