Efficient utilization of energy resources is essential for a developing country like India. The concept of smart grid (SG) can provide a highly reliable power system with optimized utilization of available resources. The present Indian power grid requires revolutionary changes to meet the growing demands and to make the grid smarter and reliable. One of the important requirements for SG is the instantaneous monitoring of the voltage, current and power flows at all buses in the grid. The traditional monitoring system cannot satisfy this requirement since they are based on nonlinear power flow equations. Synchro-phasor-measurement devices like phasor measurement units (PMUs) can measure the phasor values of voltages at installed buses. Consequently, the currents passing through all branches connected to that bus can be computed. Since the voltage phasor values at the neighboring buses of a bus containing the PMU can be estimated using Ohm’s law, it is redundant to install PMUs at all the buses in a power grid for its complete observability. This paper proposes the optimal geographical locations for the PMUs in southern region Indian power grid for the implementation of SG, using Integer Linear Programming. The proposed optimal geographical locations for PMU placement can be a stepping stone for the implementation of SG in India.