If your wife was born out of India and one her parents is a citizen of India then she becomes citizen by descent,
The provisions of the act in this regard is
Citizenship by descent.- (1) A person born outside India shall be a citizen of India by descent,-
(a) on or after the 26th day of January, 1950, but before the 10th day of December, 1992, if his father is a citizen of India at the time of his birth; or
(b) on or after the 10th day of December,1992, if either of his parents is a citizen of India at the time of his birth:
Based on this your wife would have got a the Indian passport, but if you would like to update the birth place, you can apply for it along with the original birth certificate and await reply.
The passport authorities will intimate you about any further requirement ion this on receipt of the said application.