I have created a small sample demonstrating how your requirement could be achieved by using the Custom Editor Provider feature of igGrid and handling the editCellEnding event of the igGridUpdating feature:

{
    name: "Updating",
    ...
    columnSettings: [
        {
            columnKey: "Category",
            editorProvider: new $.ig.EditorProviderInput()
        }
    ]
}

$.ig.EditorProviderInput = $.ig.EditorProviderInput || $.ig.EditorProvider.extend({
    ...
    setValue: function (val) {
        if (val !== null && typeof val !== 'string') {
            this.editor.element.val(val.Name);
        } else {
            this.editor.element.val(val);
        }
    }
    ...
});

{
    name: "Updating",
    ...
    editCellEnding: function (evt, ui) {
        var record = $("#grid").igGrid("findRecordByKey", ui.rowID);
        if (ui.columnKey === 'Category') {
            if (!ui.rowAdding) {
                ui.value = { ID: record.Category.ID, Name: ui.value }
            } else {
                ui.value = { ID: Date.now() + Math.random(), Name: ui.value }
            }
        }
    }
    ...
}

More information regarding the Custom Editor Provider feature you can find here.

Please test the sample on your side and let me know whether you find it helpful.

Looking forward to hearing from you.

Regards,
Viktor Kombov
Entry Level Software Developer
Infragistics, Inc.