Whenever I try to import my Eclipse project to Android Studio I get the following error :

You are using an old, unsupported version of Gradle. Please use version 1.8 or greater.
Please point to a supported Gradle version in the project's Gradle settings or in the project's Gradle wrapper (if applicable.)

Consult IDE log for more details (Help | Show Log)

Im using Android Studio 0.3 and Ubuntu, I also tried it on a Windows 8 box with fresh install but getting the same error. I'm using default gradle wrapper and I tried checking and unchecking auto import option. Is this a bug? How can I get around it. How do I update gradle to 1.8 or check the current gradle version? My build.gradle is given below.

buildscript {
    repositories {
        mavenCentral()
    }
    dependencies {
        classpath 'com.android.tools.build:gradle:0.6.3' 
        // I also tried using 0.6.1 and 0.5.+
    }
}
apply plugin: 'android'

dependencies {
    compile fileTree(dir: 'libs', include: '*.jar')
}

android {
    compileSdkVersion 18
    buildToolsVersion "18.0.1"

    sourceSets {
        main {
            manifest.srcFile 'AndroidManifest.xml'
            java.srcDirs = ['src']
            resources.srcDirs = ['src']
            aidl.srcDirs = ['src']
            renderscript.srcDirs = ['src']
            res.srcDirs = ['res']
            assets.srcDirs = ['assets']
        }

        // Move the tests to tests/java, tests/res, etc...
        instrumentTest.setRoot('tests')

        // Move the build types to build-types/<type>
        // For instance, build-types/debug/java, build-types/debug/AndroidManifest.xml, ...
        // This moves them out of them default location under src/<type>/... which would
        // conflict with src/ being used by the main source set.
        // Adding new build types or product flavors should be accompanied
        // by a similar customization.
        debug.setRoot('build-types/debug')
        release.setRoot('build-types/release')
    }
}