Cost reduction requires lowering number of power devices used in the converter driving SRM. This is quite feasible in SRM drive systems than in other drive systems. This paper deals with analysis and simulation of a novel two phase SRM. A novel two phase SRM has high performance, self-starling capability, high efficiency, and low manufacturing cost. Additionally, the stator back iron does not experience any flux reversal as the flux is in the same direction whether phase A or B is excited leading to a greater reduction in core losses. The magnetic analysis and design considerations of the novel two phase SRM have been obtained by the finite element analysis (FEM).