Thamel is the main tourist quarter of Kathmandu. Lots of stores selling Gurkha knives, Tibetan Thangkas, knit hats, Thai fisherman’s pants, climbing gear, and all combinations of hippy/trekking chic. As much as I love Kukris, my personal favorite store is Vajra Books:
The selection of books about Indian, Nepali, and Tibetan Buddhism is mindbogglingly good, overseen by the knowledgeable Bidur Dangol. I’ve already spent hours there, making book wish lists. My suitcase is going to be much heavier on the way back!
Oh, and they recently added a lot more space on the second floor. You’ll probably find me here if you happen to be in Nepal!