Kathmandu (and nearby Patan/Bhaktapur) has everything from jam-packed old-town fabric bazaars where you haggle for bolts of cloth to clean boutiques and modern malls that stock curated ethnic and fusion wear. If you want purely Nepali / ethnic pieces — think Dhaka weaves, Daura-Suruwal, Haku-Patasi, and Bakhu (Tibetan/Sherpa style) — head to specific neighbourhoods (Indra Chowk, Asan, Boudha, Patan/Bhaktapur) or specialist cultural shops and handloom sellers. Indra Chowk remains one of the main cloth/fabric markets in the old city.
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Where to go (neighbourhoods & what to expect)
Indra Chowk (Chokache Galli / old Kathmandu) — the textile heart of the old city: narrow lanes lined with bolt-by-bolt fabric shops, ready-made kurtis, blouses and readymade sari/kurta stalls. Great for bargains, selecting fabrics, and getting quick tailoring. Expect busy streets and wholesale/retail stalls. Perfect for festival shopping (Dashain/Tihar).

Asan (Asan Tole) — another historic market with fabrics, jewelry (pote beads), and local-style garments — a good place to feel the old trade-route market vibe and hunt for small local tailors.
Thamel — more touristy: lots of readymade souvenir shops, cashmere/shaolns and some boutiques offering ethnic-inspired fusion wear. Prices here are higher than old-town bazaars but easier for tourists who want one-stop shopping. TravelUp
Boudhanath / Boudha — the place to look for Tibetan/Sherpa/Bhutia style garments such as the Bakhu / kho / chupa. There are specialized shops around Boudha selling readymade Bakhu, prayer-cloth textiles and Tibetan style aprons. Good for authentic Bakhu pieces. Facebook Folk Bazar
Patan & Bhaktapur — best bets for Newari traditional clothes like Haku-Patasi and other Newar festival wear; Patan especially has handloom and traditional-weave sellers and tailors who know how to stitch ceremonial Newari styles. Online cultural handicraft shops also stock Haku-Patasi if you prefer pre-ordered pieces. Swodeshi

Boutiques & designers (ethnic + fusion)
If you want designer / modern-ethnic (bridal fusion, tailored kurta sets, contemporary Dhaka pieces), check local boutiques and small designers in Lalitpur/Kathmandu — names that pop up in local listings include Oodni, Kallisto, Sublime Attire and similar boutique labels which stock slow-fashion/ethnic collections and custom work (good for event outfits). These are pricier but offer curated styles and tailoring.

Shops & wholesalers (examples you can mention)
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Granth Fabrics / Ankit Emporium / Fabric House — active fabric stores in Indra Chowk / Chokache Galli for bolts, readymade kurtis, and seasonal festival stock. Perfect for fabric-first shopping and local prices.
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Mandala / Tibetan dress houses near Boudha — sell Bakhu / chupa style traditional garments (readymade sizes and custom orders). Good for Sherpa / Bhutia styles.
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Nepali Cultural House / FolkBazar / Swodeshi — wholesalers and online cultural stores that list Daura-Suruwal, Dhaka sarees, Newari Haku-Patasi, Limbu/Limbu sarees and other ethnic garments — handy if you want museum-style authenticity or bulk orders.

Malls — yes, they have ethnic too
Modern malls in Kathmandu (Labim Mall, Civil Mall, Durbar Mall and even large stores like Bhat-Bhateni) now carry a mix of international brands and local labels — you’ll find curated ethnic collections, readymade sarees, boutique stalls and easier returns/shopper comforts. If your reader prefers A/C, changing rooms and fixed prices, suggest the malls.

What to buy where (quick cheat-sheet)
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Fabric bolts & bargaining: Indra Chowk / Asan.
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Readymade everyday kurta / sari / casual ethnic: Thamel (tourist) or Chokache Galli.
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Purely Nepali/ethnic ceremonial items (Haku-Patasi, Dhaka, Daura-Suruwal): Patan, Bhaktapur, specialty cultural shops and online cultural sellers.
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Bakhu / Tibetan/Sherpa dress: Boudha and Tibetan dress houses.
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Designer / fusion / bridal: Boutiques in Kupandole, Soaltee area and Lalitpur.
Practical tips for the guide (include as callouts)
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Bargain politely in old bazaar lanes — start lower and expect to pay a little more as a tourist. In boutiques and malls, prices are fixed.
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Carry cash (NPR) for small shops; use e-wallets or cards in malls and bigger boutiques.
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Bring or know sizes — local readymade sizes differ; most places offer tailoring (stitching within 1–3 days for small jobs).
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Ask for ‘handloom’ or ‘Dhaka’ specifically if you want authentic weave (not printed). Use Nepali terms like Haku-Patasi, Daura-Suruwal, Dhaka, Bakhu/Chupa/Kho in the guide so locals and sellers understand.
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Festival seasons (Dashain/Tihar, Newari festival days) are when shops stock the best traditional pieces — great for photos and variety.
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Tailor contact: recommend readers get measurements done and keep 1–2 days extra if they want made-to-measure outfits.