Some 75% of Nepal's people engage in agriculture, which contributes about 40% of the GDP. In the Terai, the main agricultural region, rice is the chief crop; other food crops include pulses, wheat, barley, sugarcane, and oilseeds. Jute, tobacco, cotton, indigo, and opium are also grown in the Terai, whose forests provide sal wood and commercially valuable bamboo and rattan. In the lower mountain valleys, rice is produced during the summer, and wheat, barley, oilseeds, potatoes, and vegetables are grown in the winter. Corn, wheat, and potatoes are raised at higher altitudes, and terraced hillsides are also used for agriculture. Medicinal herbs, grown on the Himalayan slopes, are sold worldwide. Livestock raising is second to farming in Nepal's economy; oxen predominate in the lower valleys, yaks in the higher, and sheep, goats, and poultry are plentiful everywhere.
Transportation and communication difficulties have hindered the growth of industry and trade. Biratnagar and Birganj, in the Terai, are the main manufacturing towns, and Katmandu also has some industry. There are rice, jute, sugar, and oilseed mills; other products include carpets, textiles, cigarettes, and building materials. Wood and metal handicrafts are also important. Significant quantities of mica and small deposits of ochre, copper, iron, lignite, and cobalt are found in the hills of Nepal. Hydropower is the main source of electricity in Nepal, and there are plans to further develop the potential of the nation's rivers.
Tourism, a chief source of foreign exchange (along with international aid and Gurkha pensions), was hurt during the conflict with the country's Maoist rebels. Carpets, clothing, leather and jute goods, and grain are exported; imports include gold, machinery and equipment, petroleum products, and fertilizer. Nepal's trade is overwhelmingly with India. In recent years, significant deforestation and a growing population have greatly affected the country.