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The concept of craft villages was, introduced by the National Crafts Council in order to encourage and facilitate craft persons to work in an environment of peace and tranquility, away from the clamour and disturbances of their daily life. By creating a conducive environment to work in; we enable the crafts person to apply skill and ingenuity to his creation. Such villages help preserve traditional handicrafts with national and cultural values. Further, development of crafts, their designs, and improvement of skills and talents of crafts persons is, also accomplished in addition to providing the opportunity to uplift their social and economic status through such villages. The craft village also affords professional marketing support, since it becomes a convenient centre for locals and tourists to purchase products and to get to know the creative process of crafts by observing the craft persons work.
The handicrafts village in Sigiriya was established in 2003 and it has facilities for maintenance of a number of various fields of handicraft. 48 stalls have been set up in this village for
handicraftsmen. These craftsmen have been allowed to sell their products by depicting the way they are selling the items. It has also been enabled for the craftsmen to keep direct trade connections with the customers without interference of the intermediaries (for giving orders) and for the customers to directly buy goods from the manufacturers.