Geomagnetically induced currents (GIC) are manifestations of space weather phenomena on the electric power grid. Although not a new phenomenon, they assume great importance in wake of the present, ever expanding power grids. This thesis discusses the cause of GICs, methodology of modeling them into the power system and the ramifications of their presence in the bulk power system. GIC is treated at a micro level considering its effects on the power system assets like Transformers and also at a macro level with respect to issues like Voltage instability. In illustration, several simulations are made on a transformer & the standard IEEE 14 bus system to reproduce the effect of a geomagnetic storm on a power grid. Various software tools like PowerWorld Simulator, SimPower Systems have been utilized in performing these simulations. Contingency analysis involving the weakest elements in the system has been performed to evaluate the impact of their loss on the system. Test results are laid out and discussed in detail to convey the consequences of a geomagnetic phenomenon on the power grid in a holistic manner.