Change uses-sdk to <uses-sdk tools:node="replace" /> and addxmlns:tools="http://schemas.android.com/tools" in AndroidManifest.xml

 <?xml version="1.0" encoding="utf-8"?>
<manifest xmlns:android="http://schemas.android.com/apk/res/android"
    xmlns:tools="http://schemas.android.com/tools"
    package="com.demo.android"
    android:versionCode="16"
    android:versionName="3.3.1">
    .
    .
    <uses-sdk tools:node="replace" />
    .
    .
</manifest>

Make sure you use gradle 0.11 and above to use Manifest merger.

Solution 2:

• Change compile ‘com.android.support:support-v4:+‘ to compile ‘com.android.support:support-v4:20.+‘ in build.gradle. This will prevent gradle from using v4:21.0.0 that requires version L.

• However, if your any of your external dependencies uses the same. You will probably have to wait for them to update the same.

Solution 3:

• Remove/Comment <version>21.0.0-rc1</version> in your file <android-sdk>/extras/android/m2repository/com/android/support-v4/maven-metadata.xml

• Repeat the same for support-v7

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gradle android L problem