Before the war, the textile industry was well developed in the NKR. Several of the enterprises in this field such as the Karabakh Silk Factory (which employed 2,500 people prior to 1990), the Stepanakert Shoe Factory, carpet factories in Stepanakert and Shoushi, and other smaller garment enterprises were well known outside Nagorno Karabakh. Presently, the majority of these former state-owned enterprises have been transformed into closed joint-stock companies.
Now the textile industry is being restored by encouraging foreign investment, and by privatization of larger enterprises. The policy of encouraging investments into the textile industry contributes to the production of local raw materials, which will decrease the use of imported raw goods (i.e. silk, leather, fur, etc.).
Food processing is another large sector of industry in the NKR. There are numerous large and small enterprises in Stepanakert and throughout Nagorno Karabakh that produce wine, vodka, brandy, bread, flour, and pastries. This sector mainly processes local agricultural products (i.e. tobacco, wines and spirits, juices, canned meets, etc.).
Other developing spheres of industry are wood processing, electronic industry, radio electronics, jewelry production, and diamond processing.