Trade with other countries is an important aspect of Nepal's economy. Nepal's main export items are carpets, clothing, grain, herbal treatments and oils, pashmina and jute goods. The value of exports from Nepal as of 2005 were $822 million f.o.b. (this amount excludes border trade with India that has not been recorded). Due to several factors Nepal's exports have only increased marginally.
The agricultural region of Nepal produces crops of rice, wheat, barley, pulses, oilseeds, jute, cotton, indigo, opium and tobacco. Sal wood is obtained in the forests as are bamboo and rattan which are of great commercial value. Potatoes and other vegetables are grown in the winter months in Nepal. Medicinal herbs are grown on the slopes of the Himalaya's and make up a portion of Nepal's exports. Pashmina is wool obtained from mountain goats and is chiefly used in making shawls, popular worldwide.
The poor infrastructure of Nepal's communications and transportation systems has prevented extensive industry and trade in the country. The major manufacturing towns in Nepal are Birganj, Biratnagar and sections of Kathmandu. Products manufactured in Nepal are carpets, textiles, bricks, shoes, cigarettes and others. Metal and wooden handicrafts are very popular and contribute to the country's trade. Mica, ochre, iron, cobalt, copper and lignite can be found in Nepal's hills.
Nepal mostly trades with India. The largest percentage of exports from Nepal are transported through to India. It is vital that Nepal maintain good relations and set up agreements with its massive neighbor, India, to ensure continued economical growth.