A theoretical model is suggested that describes competition between nanoscale plastic deformation and fracture processes in the situation with dislocation emission from grain boundaries and nanocrack generation at grain boundary disclinations in plastically deformed nanocrystalline materials. In the exemplary case of nanocrystalline silicon carbide (SiC) mechanically loaded at high temperatures, it is theoretically revealed that emission of Shockley dislocations from grain boundaries represents an energetically favorable process in certain ranges of parameters specifying defect structure. We compared the energy characteristics of the competing dislocation emission and nanocrack generation processes in stress fields of disclination dipoles. It is shown that emission of Shockley partials from grain boundaries in certain conditions serves as an effective channel for relaxation of the stress fields of disclination dipoles, in which case the emission process suppresses the nanocrack generation and thereby enhances ductility of nanocrystalline materials.