SARS-CoV-2 Omicron variant is rampantly spreading across the globe. Animal models are useful in understanding the disease characteristics as well as properties of emerging SARS-CoV-2 variants. We assessed the pathogenicity and immune response generated by BA.1 sub-lineage of SARS-CoV-2 Omicron variant with R346K mutation in 5 to 6-week old Syrian hamsters. Virus shedding, organ viral load, lung disease and immune response generated were sequentially assessed. The disease characteristics of Omicron were found to be similar to that of other SARS-CoV-2 variants of concerns in hamsters like high viral replication in the respiratory tract and interstitial pneumonia. The infected hamsters demonstrated lesser body weight gain in comparison to the uninfected control hamsters. Viral RNA could be detected in nasal washes and respiratory organs (nasal turbinate, trachea, bronchi and lungs) till 10 and 14 days respectively. The clearance of the virus was observed from nasal washes and lungs by day 7. Neutralizing antibody response against Omicron variant was detected from day 5 with rising antibody titers till 14 days. However, the cross-neutralization titre of the sera against other variants showed severe reduction ie., 7 fold reduction against Alpha and no titers against B.1, Beta and Delta. This preliminary data shows that Omicron variant infection can produce moderate to severe lung disease and the neutralizing antibodies produced in response to Omicron variant infection shows poor neutralizing ability against other co-circulating SARS-CoV-2 variants like Delta which necessitates caution as it may lead to increased cases of reinfection.