I've tested this and currently you do not need to enable proguard for the 
Android Library project. In fact, I think the proguard files and the 
project.properties files for the library project are unused. What matters 
is the files in your Application Project. Whatever conditions you set in 
those files will be applied to your referenced Project Libraries as well.

Keep in mind that with the new SDK Tools change the way the Proguard config 
files are used. They split it into two files and also changed the names. 
There is one file called proguard-android.txt in the 
SDK\tools\proguarddirectory and one called 
proguard-project.txt in your project directory.

Which files get used is determined in your Application projects 
project.properties file. There is a line you need to uncomment to enable 
Proguard (it is off by default):
proguard.config=${sdk.dir}\tools\proguard\proguard-android.txt:proguard-project.txt

As you can see by default it will combine the flags and settings in those 
two files to create your proguard configuration. This only applies to new 
projects created with the newer SDK/ADT tools.

On Wednesday, May 2, 2012 12:58:29 PM UTC-7, MB wrote:
>
> Hi, 
>
> I've an application_project that depends on a library_project.  Do we 
> need to enable proguard for the library_project as well? 
> I noticed the following: 
>
> All entries in library_project/bin/proguard/mapping.txt are also 
> present in application_project/bin/proguard/mapping.txt. 
>
> Does this mean there is no need to run proguard on libary projects? 
> Enabling it on the  application project is equivalent to enabling it 
> on application project as well as library projects. 
>
> Thanks, 
>
> --MB.

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