This study examines the influence of Tamil (L1) on the processing of English (L2) collocations during reading for Tamil-English bilingual children. Building on existing research in formulaic language, we used an online processing tool to investigate whether cross-linguistic transfer can be extended beyond single lexical items to collocations in bilingual children, a population that is underrepresented in this research area. Fifty-eight children aged 9–10 years from a school in Chennai, India, took part. Using self-paced reading, children’s reading times were measured for both congruent (with equivalent in L2) and incongruent (without equivalent in L2) English collocations embedded in short passages. There were two reading modes (single and chunk), which allowed reading times for the whole collocations and the individual words of the collocations to be examined. Results showed that children read congruent collocations more quickly than incongruent collocations in both modes. For congruent collocations, children read the second word more quickly than the first word, but the reverse was true for incongruent collocations. These results suggest that the L1 (Tamil) is activated during the processing stage of reading English collocations for Tamil-English bilingual children in this context.