What makes Pondicherry an appropriate choice for Pi's upbringing?
When you speak about Pondicherry in this novel, you are speaking of the first incidence of setting of place. Therefore it's important to discuss the city in that regard.
My first (and strong) inclination is to say the VAST European influence in the city of Pondicherry in India. This is absolutely imperative in shaping Pi's thinking throughout the story. It is obvious that Pi was exposed to other religions other than his own family's. Of course, this is because Pondicherry was predominantly ruled by the French for hundreds of years already. (Even the idea of having a "zoo" for exotic animals is a fairly European idea.) Why is this important? Consider this quotation:
Hindus, in their capacity for love, are indeed hairless Christians, just as Muslims, in the way they see God in everything, are bearded Hindus, and Christians, in their devotion to God, are hat wearing Muslims.
This idea, this blending of religions is the focal point of the book (and the focus of my favorite quotation, and one I will never forget). Don't forget when the older Pi turns to the reporter and asks him which story he likes better. The reporter answers that he liked the one with the animals the best. We should stand in awe at Pi's response:
And so it is with God.
That is to imply that ANY response the reporter would have said, ANY response the reporter would have clung to, ANY response the reporter would believe, ... is the right one. And all of this from Pi growing up in Pondicherry!
Secondly, yes, I must agree that it is also important that Pondicherry be a coastal city. With little or no knowledge of the ocean or boats, Pi (despite his smarts) could not have much hope of survival. In this way, then, the setting of Pondicherry makes Pi's eventual story more realistic, for sure.
I'll reinforce the other two posts that mention the fact that Pondicherry is a coastal city. It is important for Pi's upbringing, because it means that Pi is familiar and comfortable with oceans and boats. That may seem like a small thing, but once on the life boat with Richard Parker, Pi has one fewer thing to worry about.
I'd like to go a slightly different way with Pondicherry's culture though. Pondicherry is an incredibly diverse city. It has religious influences from three major religions, and Pi eventually gravitates toward all three. He claims that he is a Christian, Hindu, and Muslim at the same time. He doesn't see that as a problem, because he sees the people of those religions intermixing within the city that he lives in.
Despite the cultural diversity of Pondicherry, the government is not as tolerant. The book takes place around the 1970's. India, at this time, is in rough shape. The government is in turmoil, and Indira Gandhi is establishing more and more power for herself. She is implementing more and more stringent rules over Pondicherry and the rest of India. So what Pi is experiencing is this weird mixture of cultural diversity and political oppression. I believe this has a huge impact on Pi and his personality. It makes him tolerant and resilient at the same time. I believe those two skills are instrumental in keeping Pi alive while on the life boat with Richard Parker.
Pondicherry is an appropriate place for Pi's upbringing for two main reasons. Firstly, because it is a coastal city - Pi is familiar with the ocean and water. In a sense his place of birth, as well as his name, Piscine, foreshadow later events in the book.
Secondly, Pondicherry allowed for the various religious influences Pi had. Because Pondicherry was under French rule for over 300 years, there were Christian monasteries and Christians in the area as well as Hindus so that Pi could become interested in Christianity by experience. Because, Pondicherry was an international port city, there were also many Muslims living amongst the predominately Hindu majority making it possible for Pi to come in contact with Islam. This might have been more uncommon if he were living in an area which was not as culturally open as Pondicherry was.