Indian-American South Carolina Governor Nikki Haley today criticised President Barack Obama's policies as having "fallen far short of his soaring words" during his seven-year-long tenure as she asked Americans to resist the "angriest voices" on immigration.

"Barack Obama's election as president seven years ago broke historic barriers and inspired millions of Americans. As he did when he first ran for office, tonight President Obama spoke eloquently about grand things. He is at his best when he does that," she said in formal Republican response to Obama's last State of the Union address.

"Unfortunately, the President's record has often fallen far short of his soaring words," said 43-year-old Haley, seen as a potential Republican vice presidential pick in 2016.

"As he enters his final year in office, many Americans are still feeling the squeeze of an economy too weak to raise income levels. We're feeling a crushing national debt, a health care plan that has made insurance less affordable and doctors less available, and chaotic unrest in many of our cities," she said.

In her impressive nine-minute speech that launched her into national politics, Haley also tried to jab her party's White House frontrunner Donald Trump by urging Americans to resist "the siren call of the angriest voices" on immigration.

She recounted her Indian-American heritage to describe her vision of America. "I am the proud daughter of Indian immigrants who reminded my brothers, my sister and me every day how blessed we were to live in this country," she said.

"Growing up in the rural south, my family didn't look like our neighbours, and we didn't have much. There were times that were tough, but we had each other, and we had the opportunity to do anything, to be anything, as long as we were willing to work for it," she added.

Haley said her story is not much different from millions of other Americans. Immigrants have been coming to US for generations to live the dream that is America, she said.

"Today, we live in a time of threats like few others in recent memory. During anxious times, it can be tempting to follow the siren call of the angriest voices. We must resist that temptation," she said, apparently referring to Trump's controversial remarks calling for a ban on Muslims immigrants in the wake of the Paris attacks, in which some of the killers are believed to have entered into France as refugees.

Haley said the US is facing the most dangerous security threat since the 9/11 terrorist attacks, in a reference to the ISIS, which has claimed responsibility for attacks in Paris and elsewhere and may have inspired last month's mass shooting in San Bernardino, California.

"Even worse, we are facing the most dangerous terrorist threat our nation has seen since September 11th, and this president appears either unwilling or unable to deal with it," Haley said, adding that soon, the Obama presidency will end, and America will have the chance to turn in a new direction.

"That direction is what I want to talk about...," said the two-term Governor of South Carolina.

Haley did not mention the Republican presidential race but said a Republican president in the White House would lower taxes, curb spending and debt and strengthen the military.

"We would encourage American innovation and success instead of demonizing them, so our economy would truly soar and good jobs would be available across our country," she said.

"We would reform education so it worked best for students, parents, and teachers, not Washington bureaucrats and union bosses. We would end a disastrous health care program, and replace it with reforms that lowered costs and actually let you keep your doctor," she added.

"We would respect differences in modern families, but we would also insist on respect for religious liberty as a cornerstone of our democracy. We would recognise the importance of the separation of powers and honour the Constitution in its entirety. And yes, that includes the Second and Tenth Amendments," Haley said.

"We would make international agreements that were celebrated in Israel and protested in Iran, not the other way around. And rather than just thanking our brave men and women in uniform, we would actually strengthen our military, so both our friends and our enemies would know that America seeks peace, but when we fight wars we win them," she said.

"We have big decisions to make. Our country is being tested. But we’ve been tested in the past, and our people have always risen to the challenge. We have all the guidance we need to be safe and successful," Haley added.