Lichen harvest and trade are closely associated with the livelihood of most of the rural people in Western Nepal. The present study investigates the commercial collection of lichens, quantifies the traded volume and relates it to a market scenario, and discusses conservation measures in relation to established legal practices in Nepal. Data on lichen trade and revenue generated for the 12 years (2000–2011) were collected and analyzed from 74 districts of Nepal. Voucher specimens were deposited at TUCH (Tribhuvan University Central Herbarium) in Nepal. The lichens collected in West Nepal are mainly used in international trade, while those in East Nepal are used locally for food. A total of 20 commercially important species of lichens were identified from five trade centers and one local market. During 2000–2011, Nepal legally exported 2020 tons of lichens and collected NRs 25,293,305 (USD 240,000). The average annual quantity of turnover was 168 tons, though it is estimated that much was exported illegally. The hill districts in Nepal, which traded 1774 tons, were more important for the collection of commercial lichen species than the Mountainous and inner-Tarai districts, which traded 167 and 108 tons, respectively. Through the Forest Act, Forest Regulations and its amendment in 2011, the collection of lichens for harvest, trade and export in any crude or processed form was banned. However, the legislation lacks an effective implementation strategy, and sustainable harvest of lichen resources based on scientific data would better serve local livelihood and lichen conservation in Nepal.