I think your niece is very lucky to have your support. I definitely don't think you're overstepping. When it comes to abuse- and as long as your own personal safety isn't at risk- I don't think "overstepping" even applies. Much respect for you. It takes guts to stand up to and for family.
It would have taken immense courage for your niece to have opened up to her parents. Yet all she heard was verbal abuse from her father. His words were absolutely appalling.
Judging from your comments, your sister has no grounds that the guy is just "using her for sex." I feel as though she is only saying that to undermine their relationship, and wouldn't make such claims if he was of the same cultural heritage.
To be honest, I'm not sure if I have any worthy advice. Racist attitudes are often quite ingrained and difficult to change. Not completely impossible but very difficult.
My only suggestion is maybe wait till your brother in law and sister are in a calmer state before trying to talk to them. They're still in the thick of it and unlikely to be receptive to anything you have to say. There's also the issue of abuse, which is never acceptable.
In the mean time, keep supporting and listening to your niece- she sounds like she needs you.
Keep writing here as well to unload (if you want to). You must be feeling incredibly conflicted and stressed. Mad props to you for being there for her.