Contemporary large language models (LLMs) rely on sub-word tokenizers and at attention mechanisms that treat every language as a statistical surface-form distribution. This paper proposes Dhatu-Former, a transformer architecture that internalizes the formal linguistic machinery of Pan.ini’s As..tadhyay the oldest known generative grammar. We hypothesize that (i) morphologically-aware, root-based (dhatu-based) tokenization can reduce vocabulary size and sequence length by 40 60%, (ii) hierarchical attention guided by Pan.inian derivation trees can yield sparse, interpretable attention with O(nlogn) complexity, and (iii) a hybrid symbolic neural reasoning layer that executes sutra-style rewrite rules can substantially reduce hallucination while enabling uni ed language math logic reasoning. We further introduce a modular Retrieval-Augmented Generation (RAG) subsystem grounded in Sanskrit lexical databases (Amarakos.a, Dhatupat.ha) and a continual learning framework inspired by the paribhas.a sutra (meta-rules) of the As..tadhyay. We present order-of-magnitude parameter reduction estimates, architectural blueprints with TikZ diagrams, and a research roadmap for empirical validation. This is a position paper; no experiments have been conducted.