How to include JAR dependency into an AAR library

By default, AAR does not include any dependencies. Solution mentioned by @Hector should work for gradle plugin < 3.0. For Gradle plugin 3.0+, try custom config as mentioned here.

android { ... }

// Add a new configuration to hold your dependencies
configurations {
    myConfig
}

dependencies {
    ....
    myConfig 'com.android.support:appcompat-v7:26.1.0'
    myConfig 'com.android.support:support-v4:26.1.0'
    ...
}

task copyLibs(type: Copy) {
    from configurations.myConfig 
    into "libs"
}

You can add this task:

task copyLibs(type: Copy) {
    from configurations.compile
    into 'libs'
}

Dependencies will be downloaded from your Nexus, but when you need package the library, execute this task first and jar files will be copied and included inside final aar.