According the the Foreign Exchange Management Act of 1999 (FEMA) a PIO is a person who is either a citizen of any country other than Pakistan and Bangladesh who has:
held an Indian Passport at any time or
himself or either his parents or any of his grandparents were citizens of India or
is a souse of an Indian citizen or
is a spouse of a person who held an Indian Passport at any time or
is a spouse of a person who either was a citizen of India or his parents or grandparents were a citizen of India