Is she PIO?
I mean did she ever been in India?
Why not? She's indian from her fathers side so probably has has been to india; to meet relatives.
by the way,
According to indian govt, "Person of indian origin" is a long term visa. It does not automatically mean that one has indian ancestry. Many people confuse it for a citizenship. That's why foreigners married to indian citizens are eligible for PIO cards. It has nothing to do with ancestry.