The post by Ajay Shah ( looks like an economist by his other writings) is a little long for the average reader who has limited attention span. The narrative keeps you pinned to your seat though.
In his post Ajay talks about the origins of diamond trade in India and its value add through the process.
Then you get to fly to De Beers in London (or to the market in Antwerp) every five weeks, where you get shown a pile of diamonds sitting on a brightly lit table. The price of the consignment is non-negotiable. The quality of rough diamonds in the pile is heterogeneous. The prospective buyer gets around 15 minutes to make a decision: to take it or leave it.
And finally explains why this business has been a family feifdom.
Second, the need for globally dispersed elements of the family. One brother sits in London, visits De Beers, buys a batch of rough diamonds (which requires making a judgment about whether the batch is a good deal). One brother sits in India and does the polishing (which requires making judgments about optimality of cuts, and handling issues of theft). One brother sits in Antwerp and sells the polished diamonds (which is pure bargaining).
If this has got you curious indeed go visit his blog post here.
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