.gradle folder in project

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Thanks for your feedback. My project needs to download an AAR file from a repo and then include it in the project’s AAR creating a fat AAR to be included in yet another project which then produces an APK. I have tried multiple ways to add the external AAR as a dependency, e.g., using flatDir and dependencies and it would build fine but it does include the external AAR contents as part of the final AAR.

Here’s the code snippet, I am putting the external AAR in libs folder

repositories{
flatDir{
    dirs 'libs'
}    
dependencies {
    compile 'abc:1.0.0@aar'
}

I have also tried to add this in dependencies:

compile fileTree(dir: 'libs', include: ['*.aar'])

But I am getting warnings like Only Jar-type local dependencies are supported. Cannot handle: aar. Am I missing something basic?