FACTOR CONDITIONS APPLICATIONEach day, in a third-class carriage of the express train that runs between Bombay and Ahmadabad, Plainly dressed couriers carry precious cargo: diamonds. Rough gems are imported to Bombay From dealers in London, Antwerp, Tel Aviv, and New York. Couriers then take these gems to Cutting and polishing centers in Gujarat state and then carry them back to Bombay to be Reexported to the world. This system, based on trust, secrecy, and skilled low-cost labor, has Worked for half a century. It has helped make India the world’s premier center for diamond Cutting and polishing. Nine out of every 10 stones sold in the world pass through India, making Diamonds that country’s largest export. India’s ability to use its skilled labor as a resource is an Example of what Michael Porter would term