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This can be done. Make sure you surrender your PIO only after your OCI is ready. You will need to hang on to your PIO for any travels outside India while your OCI is being processed in India.
It takes almost 4-6 months in India for OCI processing.
Please also check the website of the Indian FRRO closest to your stay in India. You can even call them and get more details. I have seen the website for the Mumbai FRRO for PIO and OCI; it has good info but for more info I had to call them.
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