There are few considerations.

1) The $g->render() function must be called before anything is rendered to output.
2) You can use $out variable from ( $out=$g->render() ) as a variable placeholder in smarty and print it where you wish to show grid.

Many developers are using grid with CI,Yii,etc which uses similar templating approach.

the problem was not the template engine, but when combined with a submit button. I already found the solution to this in another post >> https://phpgrid.desk.com/customer/portal/questions/1434960-blank-row-on-submit-button

Thanks!