Nepalese handmade lokta paper is made from the fibrous inner bark of high elevation evergreen shrubs primarily from two species of Dhapne (plant), Daphne boluwa and Daphne papyracea known collectively and vernacularly as lokta bushes.

Lokta bushes proliferate in open clusters or colonies on the southern slopes of Nepal's Himalayan forests.

Historically the handcrafting of lokta paper occurred in the rural areas of Nepal, most notably in the Baglung district. Today raw lokta paper is produced in more than 22 districts in Nepal, but finished lokta paper products are produced only in Kathmandu Valley and Janakpur.

Lokta paper's durability and resistance to tearing, humidity, insects and mildew have traditionally made lokta paper the preferred choice for the recording of official government records and sacred religious texts.

Handmade lokta-based craft paper products continue to offer considerable economic sustainability for poor rural Nepalese women due to their high-quality niche market potential.