There are many shops in central Kandy selling antique jewelry and silver belts. Make sure that you bargain! There is also a government-run emporium called Lasala that showcases arts and crafts. It is located on the west side of Lake Kandy. It is not as well stocked as the one in Colombo but it is cheaper.
You can also have a made-to-order Batik Wall hanging made at any of the factories that adjoin the shops. You can also pick up readymade batik clothes. Again, remember to go to a place which has a good reputation as you don’t want the colour on your brand-new shirt to run on the very first wash.