Confusion continues.

Wife and her mother both arrived in Delhi with the erstwhile PIO cards. Both cards have now been endorsed as "LIFETIME VALIDITY" by High Commission of India in Lilongwe, which has also confirmed that there is no need to make a switch to OCI card.

At adjacent immigration desks, one officer said that the erstwhile PIO card was no longer valid and the other officer said that it was. Argument ensued between the two officers. One eventually rummaged through some papers and found a circular which satisfied both of them and everyone was allowed to pass.

When asked, they advised that "for now" there is no mandatory requirement to convert to a physical OCI card anytime, but that there has been a requirement multiple times in the past which has been superceded and/or revoked, so there is no definitive answer as to what should be done for the future.