While Large Language Models (LLMs) excel in high-resource languages, their performance often degrades in low-resource languages due to tokenization inefficiencies, generative instability, and linguistic interference. This paper presents AssameseLM-E2B and its instruction-tuned variant, AssameseLM-E2B-it, a 2-billion-parameter model adapted specifically for low resource Assamese language. Built upon the Gemma-4 architecture, the model incorporates an expanded byte-level BPE vocabulary to reduce tokenization overhead by nearly 500% compared with multilingual 2B--3B baselines. We employ a parameter-efficient Continual Pre-Training (CPT) pipeline with Hybrid LoRA, followed by Supervised Fine-Tuning (SFT) on a balanced, multi-domain dataset to enhance instruction-following and Retrieval-Augmented Generation (RAG) capabilities. Evaluation demonstrates a Bits-per-Byte (BPB) score of 0.7488 on FLORES-200, alongside an overall RAG score of 96.7% and 100% refusal accuracy on adversarial unanswerable prompts. Comparative analysis reveals significant limitations in general-purpose baselines, including receptive-productive decoupling, generative degradation on Romanized Assamese, and unintended Bengali script assimilation. These results demonstrate the potential of parameter-efficient adaptation for developing capable, locally deployable language models for low-resource languages under constrained computational resources.

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